While there are many reasons for such contrasts even among the poor, one variable that repeatedly surfaces as a sort of common denominator is the accessibility to different sources and types of credit. These small amounts starkly contrast loans from banks, which tends to be large and for lump sum investments. Loans are usually made for very short periods. That is, the borrowers prefer to repay the loans quickly to avoid long-term commitments in repayments.
Loans are unsecured, and usually no collateral or guarantee is used.
Since services are localized, and only well- known borrowers identified, the rate of repayment is also very high. Such deeper understandings of the quality and quantity of credit that low-income households prefer has brought to the fore the viability of microfinance schemes to satisfy financial needs of these households. Such an initiative would enable individuals, groups and organizations to participate in a continuous exchange of know-how, experience and expertise in microfinance management. Inspiring Ideas defer from 'Best Practices' in that it documents individual components of a microfinance policy, programme or project. Inspiring Ideas are examples of actions that could be recommended for further application, whether in a similar or adapted form.