Microfinance Institution (MFI)

A financial system which provides financial services to clients for a fee. This system operates like a bank but targets low-income entrepreneurs who are not able to access the bank’s services. Services that this financial system provides can include loans and sometimes savings facilities and insurance.

Loans

The amount of loans is small and the poor do not have acceptable collateral.

Savings-Led Microfinance

While commercial banks do not want to administer small amounts of savings, the poor are able to save and have the desire to do so.  Five Talents’ Savings-Led programs, follow one (or both) of these models:

Rotating Savings and Credit Association (ROSCA)

A financial system where members’ agreed upon savings contributions are collected at an agreed-upon time and rotated, in turn, to each member.

Accumulating Savings and Credit Association (ASCA)

A financial system where members’ agreed-upon savings contributions are collected at an agreed-upon time and can be used to finance loans, insurance, and/or other financial services. Unlike a ROSCA, members’ savings contributions accumulate over time and can return a dividend to members.

Learn more about microfinance.

Read more about our program principles.