Figures show that in the absence of banks, NGOs helped households in poor countries gain access to credit via microfinance.
The average size of loans by NGOs was $184, whereas both banks and money lenders cater to the richer segments of these markets with larger loan amounts. The micro-credit agencies have mostly been focused on helping women, and they perform many social responsibilities besides giving credit.
Most of the criticism against microfinance is derived from certain case studies. There are a few cases where it has causes harm to the recipient, but these cases are in the minority. More common is the case of women like Mrs. Khorshed Alam of Chamta village. She borrowed Tk.20,000 from Grameen Bank at about 25% interest rate, which she used to buy a cow.
Already, she has sold two cows for Tk.60,000, and she now has three more worth Tk.70,000. It is not about how much she owes but how much she owns.
Understanding Microfinance http://goo.gl/fb/n0TSb #socent