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Saturday 10 December 2016

Size matters as microfinance gives unemployed a First Step up to big things

Published 12/08/2010 | 05:00

Philanthropist Norma Smurfit, chairwoman of First-Step, with Tom Sharkey of Rainbow Photography, and Diarmaid Twomey (right) of Mint Media
Philanthropist Norma Smurfit, chairwoman of First-Step, with Tom Sharkey of Rainbow Photography, and Diarmaid Twomey (right) of Mint Media

MICROFINANCE, where people who cannot get access to funding from banks are provided with credit, is set to mushroom and move into the mainstream, new research indicates.

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The report from London-based financial research group Lafferty has concluded that microfinance is set to assume a major profile.

The report analyses the dynamics behind the evolution of microfinance from a small, not-for-profit activity.

It says microfinance is set to evolve into a dynamic, profit-oriented sector that is attracting the interest of some of the world's leading financial institutions.

The goal of microfinance is to give low-income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance.

The report found that microfinance can be exceptionally profitable, due to high loan-repayment rates combined with the high interest rates that are being charged. It also found that, in spite of the prevailing high-interest rates, microfinance borrowers are usually able to comfortably repay these loans.

Yesterday, it was announced that First Step Microfinance has received significant funds, from the Department of Education and Skills, to set up national micro-enterprise networks for the growing number of unemployed nationwide. Some 80 unemployed people who wish to set up micro enterprises attended a vibrant networking event held in the Burlington Hotel, Dublin, yesterday.

Irish Independent

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