We know that traditional banks usually only give out loans to those who think they can actually pay back and are very strict with the money they will give. Do you think that microfinance help the poor or are there other ways to get out of poverty?
Either the commercial banks or the Fintech banks, they all grants their customers access to loans. Although the commerical banks could be more strict with the poor on that request because even when you goes to process transactions in the banks, the bank officials will always attend to you specially while the poor will be treated optional.
The Microfinance institutions is always acted friendly like the neighborhood, at some point, the could even grant your loan request without demanding for collateral unlike the commercial banks that acts biased. The only thing skeptic about the Fintech banks is that some had acted like the Ponzi in the past where customers
It is because bank needs lot of documents to provide a secured loan so yeah they need to make sure the borrower got the capability of paying it back except you are too rich they will just pump money on you. While these small loans offers accessibility to poor with high interest rates or simply less time frame but these are all offered to consume something not really to make anything productive, right?
They won't offer you a small loan if you are going to buy books but the same compnay will give you loan to buy an iPhone, which makes it pretty clear what their intention is behind this strategy.