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Amanda McCormick

How Microfunding Adds Up

By March 30, 2013

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Have you ever heard of "microfinance"?

It's an incredible concept for fostering entrepreneurship all over the world, through small (sometimes tiny!) grants to support small businesses. Consider these examples cited by Online MBA, including convenience store owner Marcelino Lopez from Colombia, who turned a $95 loan into a thriving business, and Hurricane Katrina survivor Bernard McGraw, who put a $4,000 loan toward growing his Cajun restaurant into a self-sustaining enterprise that is able to give back to the local homeless community.

"Microfinance" is the practice of granting small loans to entrepreneurs who would not ordinarily qualify for conventional bank loans. As concepts like "crowdfunding" proliferate, it's worth understanding where microloans fit into the overall picture of fundraising for small business. Here's an overview of how it works.

Read: An Intro to Microfinance

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