What is microfinance?

Micro- financing/Micro - crediting is most commonly defined as the provision of financial services (loans, savings, insurance, cash - transfers, etc.) to the low - income population.

Generally observed, it refers to the movement having a vision of society in which low - income households have unrestricted access to a wide range of financial services which they invest in their own business activities.

In Montenegro, micro - financing implies only the loan approval procedure, not entailing the provision of savings and other financial services, thus it may be called the micro - crediting.

Micro - credit financial institutions (MFI) deal with the approval of micro - loans. Pursuant to the Decision on Minimum Standards for the Risk Management in Micro - credit Financial Institutions of the Central Bank of Montenegro ("Official Gazette of Montenegro", No. 24/09), micro – credits are considered loans to physical persons up to EUR 5.000, entrepreneurs and business organizations up to EUR 10,000 in the first cycle, and for all categories up to EUR 30,000 in a repeated one.