What is micro finance? What is Micro Investment?

Micro Finance is a loan that is given in small amounts usually to the impoverished communities. These are usually run by non-profit organisations with a view to help such communities build infrastructure, roads, etc. Monies given to individuals come as small loans for various purposes such as business loans, study loan, etc.

Micro Investments on the other hand refer to the management of Micro Funds or very small investments from investors. These are typically in the range of $5 - $50 per month. The problem with this is that fund management is a very costly affair and the cost of distribution makes it unviable for traditional financial institutions to offer such programs.

However, it is now possible to distribute Micro Funds through the use of technology. Hence, we may see such services being rendered by both financial and non-financial institutions in the future.