Microcredit

More than 400 million poor people around the world have no access to financial services. Almost 3 billion people live on less than two dollars a day and often families eke out an existence on just half of what many of us spend daily on a cup of gourmet coffee.

Microcredit -- collateral-free, small loans to poor people for income-generating small businesses -- is a proven approach for helping people escape abject poverty. Because they have no collateral, the global poor are unable to receive loans from traditional banks. Being unbankable makes it very difficult for the poor to lift themselves out of poverty. Microcredit helps the poor open small shops and salons, sell local artisan crafts and food, and even expand pre-existing businesses. Although not a panacea, microcredit loans provide the poor with financial access that they otherwise would have never had, and it possesses the flexibility and scale to contribute greatly to the decline of poverty.

Source: Grameen Foundation