Frequently Asked Questions

Microfinance is the provision of a broad range of financial services and products such as credit, savings and insurance designed to assist poor people who lack access to financial services in the mainstream banking sector to develop their small businesses, save their earnings, and guard against risks.

Microfinance is a powerful tool in the fight against poverty. It provides poor people with the means to work their own way out of poverty and is more secure and sustainable than many aid projects, with a longer and more lasting impact.

“Access to financial services does allow people to improve their own human capital (schooling, health care) and allows for the potential for improved social capital as clients become more empowered and integrated into markets. Whether they save or borrow, evidence shows that when poor people have access to financial services, they choose to invest their loans, additional earnings, or savings in a wide range of activities and assets that benefit not only their businesses but also their households.” (CGAP)

Microcredit is the provision of small or ‘micro’ loans to poor people not served by banks because of their poverty, lack of collateral, illiteracy or lack of formal identification documents.

Microsavings are deposit services that allow poor people to securely store small amounts of money for future use. Savings accounts enable families to save for unexpected expenses, plan for future investments (children’s education), and protect assets (for example, preventing a widow’s in-laws from appropriating her earnings).

They can’t afford not to save. Learn more here.

Micro insurance protects clients and their families in case of unforeseen events (disaster, disease, death) that may cause low-income households to spend their savings, divert working capital away from their businesses, or become unable to make loan repayments. Our partners offer products such as credit life insurance, property and crop/weather insurance and funeral benefit insurance. Find out more here.

Interest is charged on loans for three reasons:

i. to cover the costs of running a microfinance programme so that it becomes sustainable

ii. to help clients become financially independent under normal market conditions

iii. to avoid distorting the local economy.

Interest rates vary between countries and types of loan.

From a developed world point of view interest rates charged by microfinance institutions may seem to be high. “Microfinance organisations charge these rates to cover their costs and keep the service available. But even these rates are far below what poor people routinely pay to village money-lenders and other informal sources, whose percentage interest rates routinely rise into the hundreds and even the thousands” (CGAP)

The fact that client numbers are growing and loan repayment continues to be an outstanding 96% shows that the rates are appropriate for our clients.

Yes. Our clients have maintained an average repayment rate of 96% or better.

84% of Opportunity clients around the world are women. In our experience, women are more likely to invest the proceeds of their business in the health, education and welfare of their families and wider communities. We’ve also seen how financial empowerment can bring women dignity and respect within their local communities.

Microfinance is a powerful tool in the fight against poverty. It provides poor people with the means to work their own way out of poverty and is more secure and sustainable than many aid projects, with a longer and more lasting impact.

“Access to financial services does allow people to improve their own human capital (schooling, health care) and allows for the potential for improved social capital as clients become more empowered and integrated into markets. Whether they save or borrow, evidence shows that when poor people have access to financial services, they choose to invest their loans, additional earnings, or savings in a wide range of activities and assets that benefit not only their businesses but also their households.” (CGAP)