Editing Microcredit (section)

==Examples==

===Bangladesh===
Grameen Bank in [[Bangladesh]] is the oldest and probably best-known microfinance institution in the world.{{Citation needed|date=May 2025}} [[Grameen Bank]] launched their [[Grameen America|US operations]] in New York in April 2008.<ref>University of Michigan, Urban and Regional Planning Economic Development Handbook: [http://www.umich.edu/~econdev/microcredit/ Microcredit strategies for assisting neighborhood businesses] {{Webarchive|url=https://web.archive.org/web/20080528052827/http://www.umich.edu/~econdev/microcredit/ |date=May 28, 2008 }}, 22 March 2005, retrieved on 13 February 2012</ref> Bank of America has announced plans to award more than $3.7 million in grants to nonprofits to use in backing microloan programs.<ref>{{cite news|title=Bank of America Issues Grants for Microloans|url=https://www.wsj.com/articles/SB10001424052748703735804575535900346930486|newspaper=Wall Street Journal|access-date=30 January 2012|date=October 6, 2010|archive-date=November 7, 2017|archive-url=https://web.archive.org/web/20171107022248/https://www.wsj.com/articles/SB10001424052748703735804575535900346930486|url-status=live}}</ref> [[Accion USA|The Accion U.S. Network]], the US subsidiary of the better-known [[Accion International]], has provided over $450 million in microloans since 1991, with an over 90% repayment rate.<ref>{{cite web|url=http://www.accion.org/our-impact/us-network|title=U.S. Network|date=5 June 2014|access-date=2015-05-19|archive-url=https://web.archive.org/web/20180222224113/http://accion.org/our-impact/us-network|archive-date=2018-02-22|url-status=dead}}</ref> One research study of the Grameen model shows that poorer individuals are safer borrowers because they place more value on the relationship with the bank.<ref>{{Cite web |url=http://www.kansascityfed.org/PUBLICAT/RESWKPAP/PDF/rwp10-11.pdf |title=Federal Reserve Bank of Kansas City, ''The Creditworthiness of the Poor: A Model of the Grameen Bank'', April 2010 |access-date=September 25, 2012 |archive-date=October 19, 2012 |archive-url=https://web.archive.org/web/20121019030548/http://www.kansascityfed.org/PUBLICAT/RESWKPAP/PDF/rwp10-11.pdf |url-status=live }}</ref> Even so, efforts to replicate Grameen-style [[solidarity lending]] in developed countries have generally not succeeded. For example, the [[Calmeadow Foundation]] tested an analogous peer-lending model in three locations in [[Canada]] during the 1990s. It concluded that a variety of factors—including difficulties in reaching the target market, the high risk profile of clients, their general distaste for the joint liability requirement, and high overhead costs—made solidarity lending unviable without subsidies.<ref>Cheryl Frankiewicz. "Calmeadow Metrofund: A Canadian Experiment in Sustainable Microfinance", Calmeadow Foundation, April 2001.</ref> Microcredits have also been introduced in [[Israel]],<ref>[http://www.svivatomehet.org.il Svivatomehet.org.il] {{Webarchive|url=https://web.archive.org/web/20090318141509/http://www.svivatomehet.org.il/ |date=March 18, 2009 }} {{in lang|he}}</ref> [[Russia]], [[Ukraine]] and other nations where micro-loans help small business entrepreneurs overcome cultural barriers in the mainstream business society. The Israel Free Loan Association (IFLA) has lent more than $100 million in the past two decades to Israeli citizens of all backgrounds.<ref>Israel Free Loan Associantion, History of IFLA, {{cite web |url=http://israelfreeloan.org.il/about/history |title=History of IFLA &#124; Israel Free Loan Association |access-date=2013-07-26 |url-status=dead |archive-url=https://web.archive.org/web/20131004233544/http://israelfreeloan.org.il/about/history |archive-date=2013-10-04 }}, July 26, 2013</ref>

=== India ===
In [[India]], the [[National Bank for Agriculture and Rural Development]] (NABARD) finances more than 500 banks that on-lend funds to [[self-help group (finance)|self-help group]]s (SHGs). SHGs comprise twenty or fewer members, of whom the majority are women from the poorest [[caste]]s and tribes. Members save small amounts of money, as little as a few rupees a month in a group fund. Members may borrow from the group fund for a variety of purposes ranging from household emergencies to school fees. As SHGs prove capable of managing their funds well, they may borrow from a local bank to invest in small business or farm activities. Banks typically lend up to four rupees for every rupee in the group fund. In Asia borrowers generally pay interest rates that range from 30% to 70% without commission and fees.<ref>Nimal A. Fernando:[http://www.ruralfinanceandinvestment.org/sites/default/files/1153144135194_Microcredit_interest_rates_ADB.pdf Understanding and Dealing with High Interest Rate on Microcredit] {{Webarchive|url=https://web.archive.org/web/20170420045602/http://www.ruralfinanceandinvestment.org/sites/default/files/1153144135194_Microcredit_interest_rates_ADB.pdf |date=April 20, 2017 }}, Asian Development Bank, May 2006, p. 1</ref> Nearly 1.4 million SHGs comprising approximately 20 million women now borrow from banks, which makes the Indian SHG-Bank Linkage model the largest microfinance program in the world. Similar programs are evolving in Africa and Southeast Asia with the assistance of organizations like [[IFAD]], [[Opportunity International]], [[Catholic Relief Services]], [[Compassion International]], [[CARE (relief agency)|CARE]], APMAS, [[Oxfam]], [[Tearfund]] and [[World Vision]].

===Pakistan===
Microcredit initiatives in Pakistan have developed significantly over the past several decades, evolving from early cooperative lending models to large-scale institutional frameworks.<ref name=":5">{{Cite journal |last=Shah |first=Dr. Syed Abrar Hussain |last2=Langrial |first2=Prof. Dr Altaf Hussain |last3=Mahmood |first3=Dr. Hafiz Muhammad Hassan |title=Micro Financing in Pakistan: A Historical Study |url=https://www.researchgate.net/publication/387541304_Micro_Financing_in_Pakistan_A_Historical_Study_Micro_Financing_in_Pakistan_A_Historical_Study |journal=Quarterly Research Journal “Al-Marsoos” |volume=2 |issue=4 |via=Research Gate}}</ref> The first major microcredit initiative in the region was the [[Comilla Model]], introduced in the 1950s by [[Akhtar Hameed Khan]] in East Pakistan (now Bangladesh).<ref name="Bateman 2010" /> The Comilla Model was designed to address rural poverty through group-based lending and village cooperatives, aiming to empower small farmers by providing access to credit without traditional collateral.<ref name="Bateman 2010" /> While the model initially showed promise, it faced challenges due to bureaucratic interference, mismanagement, and power imbalances within borrower groups, ultimately limiting its long-term impact.<ref name="Bateman 2010" />

Following the separation of Bangladesh in 1971, microcredit efforts in Pakistan evolved independently, influenced by both global microfinance trends and local economic conditions. In 2001, the establishment of '''Akhuwat''' marked a significant shift in microcredit philosophy within Pakistan.<ref name=":3">{{Cite news |date=2024-09-22 |title=Home - Akhuwat.com.pk |url=http://www.akhuwat.com.pk |archive-url=http://web.archive.org/web/20250328215835/https://akhuwat.com.pk/ |archive-date=2025-03-28 |access-date=2025-05-08 |work=Akhuwat.com.pk - One Stop Solution for Akhuwat Loans |language=en-US}}</ref> Founded by '''Dr. Amjad Saqib''', Akhuwat operates on a unique interest-free lending model funded entirely by donations and community support.<ref name=":3" /> The organization disburses loans to low-income borrowers through a network of mosques and community centers, promoting principles of social justice and financial inclusion. Akhuwat has provided over PKR 200 billion in interest-free loans to more than 4.5 million families as of 2024, positioning itself as one of the largest microfinance institutions in the country.<ref name=":3" /><ref name=":4">{{Cite journal |last=Bashir |first=Mohsin |last2=Saleem |first2=Ashar |last3=Ahmed |first3=Ferhana |date=2019-03-01 |title=Akhuwat: Measuring Success for a Non-profit Organization |url=https://journals.sagepub.com/doi/10.1177/0972820119825973 |journal=Asian Journal of Management Cases |language=EN |volume=16 |issue=1 |pages=100–112 |doi=10.1177/0972820119825973 |issn=0972-8201}}</ref>

Akhuwat’s success has been attributed to its emphasis on community engagement and its rejection of interest-based lending, aligning its model with both Islamic finance principles and conventional microcredit structures.<ref name=":4" /> Borrowers are required to repay only the principal amount, fostering a culture of mutual support and accountability.<ref name=":4" /> Akhuwat also offers social services such as educational scholarships, housing loans, and small business training to further enhance economic stability among beneficiaries.<ref name=":4" />

Microcredit initiatives in Pakistan have developed significantly over the past several decades, transitioning from cooperative lending models to formalized institutional frameworks.<ref name=":5" /> While Akhuwat is a notable example of interest-free microfinance, other organizations have also contributed to the sector.

[[Kashf Foundation]], established in 1996, was one of the first microfinance institutions in Pakistan to focus on women’s economic empowerment through microloans. The organization has expanded its services to include microinsurance and financial literacy programs.<ref>{{Cite web |title=Kashf Foundation |url=https://kashf.org/ |access-date=2025-05-13 |website=kashf.org}}</ref>

Khushhali Microfinance Bank (KMBL), founded in 2000 as part of the Microfinance Sector Development Program, provides microloans, agricultural credit, and digital banking services. KMBL operates as a for-profit institution and focuses on small business lending.<ref>{{Cite web |title={{!}} Khushhali Microfinance Bank |url=https://khushhalibank.com.pk/ |access-date=2025-05-13 |website=khushhalibank.com.pk}}</ref>

The National Rural Support Programme (NRSP), launched in 1991, is the largest rural development initiative in Pakistan. NRSP offers microloans alongside agricultural training and infrastructure development for low-income households.<ref>{{Cite web |title=National Rural Support Programme |url=https://nrsp.org.pk/ |access-date=2025-05-13 |website=nrsp.org.pk}}</ref>

The Pakistan Poverty Alleviation Fund (PPAF), established in 2000, functions as an apex institution that allocates funds to partner organizations involved in poverty reduction through microcredit, asset transfers, and community-based projects.<ref>{{Cite web |title=Home {{!}} Pakistan Poverty Alleviation Fund |url=https://www.ppaf.org.pk/ |access-date=2025-05-13 |website=www.ppaf.org.pk}}</ref>

Despite the expansion of microcredit in Pakistan, challenges such as operational costs, outreach in remote areas, and regulatory constraints remain prevalent. 

=== United States ===
In the United States, microcredit has generally been defined as loans of less than $50,000 to people—mostly entrepreneurs—who cannot, for various reasons, borrow from a bank. Most nonprofit microlenders include services like financial literacy training and business plan consultations, which contribute to the expense of providing such loans but also, those groups say, to the success of their borrowers.<ref>{{cite news|url=https://www.nytimes.com/2013/10/29/business/microcredit-for-americans.html|title=Microcredit for Americans|first=Shaila|last=Dewan|website=[[The New York Times]]|date=October 29, 2013|access-date=May 10, 2018|archive-date=May 11, 2018|archive-url=https://web.archive.org/web/20180511015012/https://www.nytimes.com/2013/10/29/business/microcredit-for-americans.html|url-status=live}}</ref> One such organization in the United States, the [[Accion U.S. Network]] is a nonprofit microfinance organization headquartered in New York, [[New York City|New York]]. It is the largest and only nationwide nonprofit microfinance network in the US. The Accion U.S. Network is part of Accion International, a US-based nonprofit organization operating globally, with the mission of giving people the financial tools they need to create or grow healthy businesses. The domestic Accion programs started in [[Brooklyn]], New York, and grew from there to become the first nationwide network microlender.<ref>[[Accion U.S. Network]]</ref>{{Circular reference|date=May 2018}} US microcredit programs have helped many poor but ambitious borrowers to improve their lot. The Aspen Institute's study of 405 microentrepreneurs indicates that more than half of the loan recipients escaped poverty within five years. On average, their household assets grew by nearly $16,000 during that period; the group's reliance on public assistance dropped by more than 60%.<ref>{{cite journal |url=https://hbr.org/1999/11/can-microcredit-work-in-the-united-states |title=Can Microcredit Work in the United States? |date=1 November 1999 |journal=Harvard Business Review |last1=Bhatt |first1=Nitin |last2=Painter |first2=Gary |last3=Tang |first3=Shui-Yan |access-date=March 7, 2018 |archive-date=March 7, 2018 |archive-url=https://web.archive.org/web/20180307151030/https://hbr.org/1999/11/can-microcredit-work-in-the-united-states |url-status=live }}</ref> Several corporate sponsors including Citi Foundation and Capital One launched Grameen America in New York. Since then the financial outfit—not bank—has been serving the poor, mainly women, throughout four of the city's five boroughs ([[The Bronx|Bronx]], Brooklyn, [[Manhattan]], and [[Queens]]) as well as Omaha, Nebraska and Indianapolis, Indiana. In four years, Grameen America has facilitated loans to over 9,000 borrowers valued over $35 million. It has had, as Grameen CEO Stephen Vogel notes, "a 99 percent repayment rate".<ref>{{cite web|url=https://www.forbes.com/sites/elmirabayrasli/2012/03/26/microfinance-in-america/#1714c90846e8|title=Microfinance in America?|first=Elmira|last=Bayrasli|website=forbes.com|access-date=May 10, 2018|archive-date=May 11, 2018|archive-url=https://web.archive.org/web/20180511014355/https://www.forbes.com/sites/elmirabayrasli/2012/03/26/microfinance-in-america/#1714c90846e8|url-status=live}}</ref>

===Peer-to-peer lending over the Web===
The principles of microcredit have also been applied in attempting to address several non-poverty-related issues.  Among these, multiple Internet-based organizations have developed platforms that facilitate a modified form of [[peer-to-peer lending]] where a loan is not made in the form of a single, direct loan, but as the aggregation of a number of smaller loans—often at a negligible interest rate.

Examples of platforms that connect lenders to micro-entrepreneurs via Internet are [[Kiva (organization)|Kiva]], [[Zidisha]], and the [[Microloan Foundation]]. Another internet-based microlender, United Prosperity (now defunct), uses a variation on the usual microlending model; with United Prosperity the micro-lender provides a guarantee to a local bank which then lends back double that amount to the micro-entrepreneur. United Prosperity claims this provides both greater leverage and allows the micro-entrepreneur to develop a credit history with their local bank for future loans.<ref>{{cite web |date=27 August 2009 |title=Nonprofit Uses Social Guarantors to Support Struggling Entrepreneurs |url=http://www.thedailytell.com/2009/08/nonprofit-uses-social-guarantors-to-support-struggling-entrepreneurs/ |access-date=25 October 2009 |website=The Daily Tell |archive-date=December 4, 2022 |archive-url=https://web.archive.org/web/20221204044619/https://www.thedailytell.com/2009/08/nonprofit-uses-social-guarantors-to-support-struggling-entrepreneurs/ |url-status=live }}</ref><ref>{{cite web |date=22 June 2009 |title=World's first person-to-person loan guarantee website enters the field |url=http://www.alliancemagazine.org/node/2288 |access-date=28 October 2009 |website=@alliance |archive-date=July 25, 2009 |archive-url=https://web.archive.org/web/20090725091425/http://www.alliancemagazine.org/node/2288 |url-status=live }}</ref> In 2009, the US-based nonprofit [[Zidisha]] became the first peer-to-peer microlending platform to link lenders and borrowers directly across international borders without local intermediaries.<ref>[http://www.microfinancefocus.com/news/2010/02/07/zidisha-set-to-expand-in-peer-to-peer-microfinance-julia-kurnia/ "Zidisha Set to "Expand" in Peer-to-Peer Microfinance", Microfinance Focus, Feb 2010] {{webarchive|url=https://web.archive.org/web/20100228000309/http://www.microfinancefocus.com/news/2010/02/07/zidisha-set-to-expand-in-peer-to-peer-microfinance-julia-kurnia |date=2010-02-28 }}</ref> From 2008 through 2014, [[Vittana]] allowed peer-to-peer lending for [[student loan]]s in developing countries.<ref>Rao. L. (2010). ''Vittana Applies The Kiva Model To Help Finance Education In Developing Countries''. Retrieved March 9, 2011, from https://techcrunch.com/2010/03/15/vittana-applies-the-kiva-model-to-help-finance-education-in-developing-countries/ {{Webarchive|url=https://web.archive.org/web/20161105075851/https://techcrunch.com/2010/03/15/vittana-applies-the-kiva-model-to-help-finance-education-in-developing-countries/ |date=November 5, 2016 }}</ref>