Microlending Has Come A Long Way: Its History Over The Years

Here is what our research has uncovered. Microcredit comes to give hope to those who would never qualify for a loan in traditional financial institutions. Most of these people can not qualify for a loan because they do not have collateral. MicroCreditCapital looks at substitutes to collateral in its determination and evaluation of good and sound business ideas.

The PBS/Frontline journalist did a series on microfinance. Its journalist Bob Krieger wrote the following, "In most Western or developed countries, it's relatively easy to obtain credit through large banks or money lending institutions. But in the developing world, where many people lack steady employment, credit history or collateral, there's often no way for legitimate small businesses to receive a loan.

In many ways, microfinance changed all of this. Generally defined as small lending to the rural poor in developing countries, microfinance has made great strides in the latter half of the 20th century. The 2006 Nobel Prize awarded to Dr. Muhammad Yunus, one of the founders of modern microfinance, has helped to push the industry even further into the spotlight. But the idea of microfinance has existed for hundreds of years -- in many regions and in many forms.
The Origins of Small Lending

Microlending often starts in small villages, where family members and friends get together in money-sharing groups. Mary Coyle, director of the International Institute at St. Francis Xavier University in Nova Scotia, Canada, has studied the history of microcredit and says that these savings clubs can be traced to all parts of the world. "They have operated for centuries -- probably since the introduction of currency.'"