Microfinance is a term for financial services that are offered to individuals of lower socioeconomic backgrounds or those who lack access to traditional financial services. Microfinance includes a number of services, such as savings accounts, checking accounts, fund transfers, micro insurance, and microcredit.

Microfinance is very beneficial, as it provides financial opportunities for those in impoverished nations or those with lower socioeconomic backgrounds. Another benefit of microfinance is that it encourages people to be financially independent and provides them with financial resiliency to be able to cover any large unforeseen expenses.

Additionally, microfinance helps to provide financial services to those in remote locations where traditional financial institutions do not have operations. It also provides education. Finally, microfinance can encourage entrepreneurial activity and business development in poverty-stricken areas.