Microfinance glossary

Bankable A bank’s assessment that a person is ‘credit-worthy’, able to repay loans.   Capital Financial wealth, especially that used to start or maintain a business.   Collateral A security or guarantee (usually an asset) pledged for the repayment of a loan.   Default The act of a party or person who is unwilling or unable to maintain their debt obligations.   Entrepreneur Someone who organises, manages, and assumes the risks of a business or enterprise.   Human resources Skills, knowledge and labour of people, who contribute to a business, and are exchanged for a wage or salary.   Microcredit A small loan to entrepreneurs too poor to qualify for traditional bank loans. Microcredit can be offered, often without collateral, to an individual or through group lending.   Microenterprise A small-scale business which provides the sole source of family income or supplements other forms of income. Typical activities include food sales, sewing workshops, carpentry shops and market stalls.   Microfinance Financial services, such as loans, savings, insurance and money transfer services, targeted at low-income clients.   Natural resources Resources in the environment, such as land, water, trees, and oil, which contribute to a business, which may be paid for in rent or rates, but are sometimes considered free.