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Tags: microfinance
Categories: Economics & Finance
Community Banks/Village Banks are formal versions of ‘associations’ and are created by members of a target community who wish to improve their living standards and to generate employment. By offering microfinance services, these banks seek to develop their communities.
Guarantees are provided by social collateral (peer-pressure) as services are distributed through 5-member groups where each member’s eligibility for loans is based on his/her peer’s performance.
(source: http://microfinancehub.com/2010/04/03/8-microfinance-lending-models-types-of-mfis/)
