The practice of offering small,collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generating activities is known as:

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The practice described is an example of microfinance. Microfinance institutions provide small loans to low-income individuals who lack access to traditional banking services. These loans are often collateral-free, making them accessible to people who might not have valuable assets to put up as collateral. Philanthropic lending involves giving money to charitable causes, while nanofinance is an approach to financial services that focuses on extremely small transactions. Loan-sharking involves illegal lending practices characterized by high interest rates and aggressive collection tactics.

The Practice of Offering Small,collateral-Free Loans to Individuals Who Otherwise