Introduction Microfinance is defined as financial services provided by the various services providers to the poor and low-income customers

or people. This term is often refers as providing loans and others services by the financial institutions called microfinance institutions. These microfinance institutions provide the loans to the low or unsalaried borrowers with little security or no collateral. Implications of the Microfinance on the Developing Countries In the 1982 the Aga Khan Rural Support Program (AKRSP) launched its credit operation in north in Pakistan and orange pilot project in the same year. The whole model was implemented in Pakistan in 1990s with the name of the National Rural Support Program (NRSP). The microfinance has great importance on the developing nations like Pakistan, Bangladesh, and Sri Lanka Etc. there are many areas in which microfinance are operating in the developing countries. They include: Increase of income Improvement of nutrition Access to clean water Easy access to Medicine Empowerment of Women

There are some different areas on which the microfinance organizations have impact. They include: Creation of jobs Business growth.

Improved credit rating Improvement of quality of life.

The microfinance has great impact on both the borrower and communities. Because of the microfinance, the numbers of jobs created. The research found that 60% borrower is capable to employ other. Advantages and Disadvantages of Microfinance The microfinance has both the advantages and disadvantages. They are discussed below one by one. Advantages of Microfinance The microfinance has following advantages: Provide Access to the Funding: The microfinance provides the necessary funds to the business owners for their urgent need. The business owners acquired the necessary funds from informal relationship which are costly and unreliable. The microfinance institutions release such requirement by providing loans supple rates. Encourage self-sufficiency and entrepreneurship. Sometimes less privilege people have good ideas of doing profitable business. But they dont have enough capital to start their business. The microfinance institutions provide enough capital to these people to start their own business. They can pay their loans when they have enough capital to pay off the loans.

Manage Risk The micro finance provides capital stability, which gives them financial safety from unexpected monetary problems. Saving permit them for better nourishment, reduced illness improved living conditions. Empower Women Micro finance also empowers women, since they are also big beneficiaries. Microfinance institution also provides the loans to the women to start their business. Disadvantages of Microfinance A main disadvantage of microfinance is that the deal is tinny for the lenders to dedicated plenty time. The rates are too high by the borrower.

Recommendation Microfinance is best for any economy