What is the primary purpose of microcredit?

The primary purpose of microcredit is to offer small loans to individuals who lack access to traditional banking services, particularly those in low-income or developing regions. This financial mechanism is designed to empower the economically disadvantaged by giving them the opportunity to start or expand small businesses, acquire essential goods, or improve their living conditions. Microcredit aims to alleviate poverty by providing financial resources to individuals who otherwise would not qualify for loans due to a lack of collateral or credit history, thereby fostering entrepreneurship and promoting self-sufficiency within communities. This approach supports local economic development and creates a sustainable cycle of income generation.