What term describes lenders who assist individuals lacking sufficient income for traditional bank loans?

• A. Microfinance
• B. Venture Capitalist
• C. Trade Payable
• D. Trade Credit

Answer: (A)

Microfinance refers to a financial service that provides low-income individuals or those lacking sufficient credit history with access to small loans and financial services that are often not available through traditional banking institutions. This concept is designed to help individuals or small business owners who do not have sufficient income or collateral to qualify for standard bank loans. The goal of microfinance is to improve the economic conditions of borrowers by enabling them to invest in ventures or resources that can generate income and uplift their economic status.

Venture capitalists provide funding to startups and businesses with high growth potential, which often requires thorough vetting and typically focuses on equity investment rather than providing loans for individuals lacking income. Trade payable and trade credit are terms related to business operations that involve delayed payments for goods or services received, but they do not address the need for financial support for individuals with inadequate income.