Microcredit is characterized by consisting of very small loans to impoverished borrowers who typically lack collateral, steady employment and a verifiable credit history. Although, microcredit may be inappropriate where conditions pose severe challenges as the clients must have the capacity to repay the loan under the terms by which it is provided. Otherwise, clients may not be able to benefit from credit and arises the risk of being pushed into debt problems.
- Access to credit despite of not having sufficient collateral, steady employment and a verifiable credit history
- The credit should be paid in a short period constraining the period of time business have to generate money