“When combined with information and communication technologies, microcredit can unleash new opportunities for the world’s poorest entrepreneurs and thereby revitalize the village economies they serve.” – Madeleine Albright
People all over the world are constantly attacked by predatory loan sharks. All the recent studies have stated that population has been increasing in a non-linear format, which means that it is increasing at a decreasing or an increasing rate. It has, therefore, become very difficult in capturing the real trend that is evolving.
This new trend is becoming a buzz-word among the human well-fare practitioners who are socially active to grant appropriate institutions, loan associations, and designing the right methodologies. The microcredit system is a sine qua non for capitalist development of commercial banks. Lending to poor rural people is an extremely risky business but however, lending them money is also becoming mandatory to aid their survival. In countries like India, loans are usually granted to farmers for agricultural purposes. Rural people are generally very mobile and are often observed to be traveling back and forth from rural areas, which can facilitate debt evasion. Governments and private financial organizations are very keen on implementing money granting services. But, these policies have shown a major limitation in terms of the high interest rates and the lack of appropriate funding channels. This is where microcredit is rising and features the compensation of the inadequate nature of regular financial institutions by providing small loans in nontraditional economic sectors.