Microfinance refers to financial services like small loans, savings, and insurance provided to low-income individuals or small businesses who do not have access to traditional banking.
Microfinance aims to promote financial inclusion by providing basic financial services to underserved sections of society, especially in rural and semi-urban areas.
These services are typically offered by Microfinance Institutions (MFIs), NBFCs, and banks, and are regulated in India by the Reserve Bank of India.
"A rural woman borrows ₹20,000 from a microfinance institution to start a small tailoring business—this is microfinance."