Question

Explain the role of micro-credit in meeting credit requirements of the poor.

Answer 1

Micro-credit plays an important role in meeting the credit requirements of the poor. Under micro-credit programmes, farmers get adequate credit at cheaper rates. Micro-credit programme promotes thrift in small proportions by a minimum contribution from each member. From the pooled money, credit is given to the needy members, which is repayable in small instalments at reasonable interest rates.
Micro-credit programme removes the need of any kind of collateral. It also helps in women empowerment.