When obtaining microcredit, small groups of low-income entrepreneurs can borrow money at competitive rates without having to put up collateral.

Question

Quizplus · Accepted Answer

Microcredit is a financial tool that provides small loans to low-income individuals, particularly those in developing countries, who lack access to traditional banking services. It is often provided in the form of small groups, known as "microfinance groups" or "self-help groups," who collectively borrow money and support one another's businesses. These loans are typically offered without requiring collateral, as many borrowers do not have assets to put up as security. The interest rates on microcredit loans are often competitive with or lower than those offered by traditional lenders.

When Obtaining Microcredit, Small Groups of Low-Income Entrepreneurs Can Borrow