Microfinance

Around the world there are people who have opportunities to have businesses but for poor people these opportunities are minimum; however, microfinance is a social help for this kind of people.

According to Wikipedia the meaning of microfinance “is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and related services.” That means that microfinance helps people who cannot apply for a loan in a bank because they do not have much money.

Usually, this kind of people do not have any type of general school education, but they want to be successful in life. For this reason, microfinance gives economic support to people who want to work, but due to lack of studies or low social class, they do not have the same opportunities that other people do.

According to Wikipedia the objective of microfinance is “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers. Those who promote microfinance generally believe that such access will help poor people out of poverty.”

The objective of microfinance is so clear; they want to give people a better economic class, but not only money. Microfinance gives people a kind of guaranties if people who lent money die. This is so important because everybody has to die in some moment but for people who have a stable job it is easier to save money for their children or their family than to poor people.

In Costa Rica, there are some companies which give money to people who want to have their own cottage industry, but those companies work a little bit different that microfinance because they are a kind of bank; they provide loans to people with higher interests.

Actually, Costa Rican poor people cannot ask for a loan in these companies because the interests are so high, although these businesses help people to have a better economic life because they give the basic economic support to people to have their cottage industry.

In Costa Rica there is also a kind of study help. INA is a public company who works for free. People can go there and take any kind of free classes. When people finish the courses, they get a degree which is certified and then they can work and earn money.

Our country does not have exactly a microfinance help, but it has other kinds of help like study companies and businesses which lend money to people, so there are advantages for us.