Solidarity lending
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Solidarity lending is a lending practice where small groups borrow collectively and group members encourage one another to repay. It is an important building block of microfinance.
Solidarity lending involves collateral-free loans through solidarity groups and village organizations like this one in Bangladesh.
Microcredit
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Microcredit is the extension of very small loans to impoverished borrowers who typically do not have access to traditional banking services due to a lack of collateral, steady employment, and a verifi
Solidarity lending
…Solidarity lending takes place through 'solidarity groups'. These groups are a distinctive banking distribution channel used primarily to deliver microcredit to poor people. Solidarity lending lowers the costs to a financial institution related to assessing, managing and collecting loans, and can eliminate…
State-funded Utkal Grameen Bank in Bargaon, Odisha.
Many microfinance institutions also offer savings facilities, such as Banco Palma in Brazil, shown here.