Microfinance is a set of tools, approaches and strategies
addressing the needs of people who are financially excluded.
Microfinance offers low-income people access to basic financial
services such as small loans, savings, insurance, bill-payment and
money-transfer facilities, superannuation and financial advice.
Microfinance seeks to provide fair, safe and ethical financial
services for people who, because of their circumstances, are not
able to access mainstream financial services. Its purpose is to
alleviate and eliminate poverty. Therefore exploitative, predatory
or unfair lenders are not included in the definition.
Financial exclusion is a process whereby a person, group or
organisation lacks or is denied access to affordable, appropriate
and fair financial products and services, with the result that
their ability to participate fully in social and economic
activities is reduced, financial hardship is increased, and poverty
(measured by income, debt and assets) is exacerbated. Addressing
financial exclusion is not merely about service provision; it also
includes capacity building and structural change.
Sustainability is about ensuring the continuity of services and
programs that make a positive and ongoing contribution to
addressing financial exclusion. It considers both financial and
See Burkett & Sheehan 2009 for more details
Financial inclusion programs
||Access to small amounts of credit (under $5,000) at fair and
affordable rates, and with non-exploitative conditions.
||Small amounts of start-up and growth capital with minimal or no
||Incentives for starting and maintaining small savings
||Affordable small insurance policies to cover essentials (such
as home contents), with payment arrangements that suit people
living on low incomes.
||Affordable, safe and reliable options for remitting funds and
depositing these funds in poorer overseas countries.
||Mechanisms for ensuring opportunities for contributions
(particularly employer contributions) for people living on low
incomes who are employed casually.
||Financial counseling for crisis management, but also advice
regarding financial management on low incomes.
||Mechanisms whereby people living on low incomes can breakdown
bill payment into installments and access options such as direct
deductions from Centrelink or split accounts at banks.
Lessons from financial inclusion overseas
Much has been accomplished by organisations working overseas.
The following websites offer further information on programs and
work in other countries.