Šafránková M., Srnec K.
Abstract
Poor people in developing countries face to lack acces to financial services from institution, either for credit or savings. There are many reasons cousing this situation of
the poor in developing countries such as policy of banks, their location, distrust and fear of low-educated people from complicated process relating to administration of banks
etc., and especially collateral required by banks. Microfinance Institutions are providing poor people with effective financial services and delevoping private sector by
targeting small enterprises. The frequently discussed issue is the cost of microcredit and interest rate which is very often higher than interest rate of a loan provided by
conventional banks despite the fact that the target group of microfinance institutions consists of particularly poor and low-income people. But it should be looking at
microfinance in both financial and social perspektive and it should reconcile the social impact of microcredit and, cost recovery leading to self-sufficiency and sustainability
of microfinance institutions.
Key words:
microcredit, microfinance, non-financial services, collateral, interest rate