Glossary term

Microfinance Institution (MFI)

Organization that offers financial services to low-income populations. Almost all of these offer microcredit and only take back small amounts of savings from their own borrowers (if allowed by law), not from the general public. Within the microfinance industry, the term microfinance institution has come to refer to a wide range of organizations dedicated to providing these services: NGOs, credit unions, cooperatives, private commercial banks and non-bank financial institutions (some that have transformed from NGOs into regulated institutions), and parts of state-owned banks, for example.