THE ROLE OF MICROFINANCE IN ADDRESSING THE CHALLENGE OF FINANCIAL SERVICES FOR THE POPULATION

Abstract

The article discusses the current issue of microcredit for small businesses. Microfinance organizations (MFOs) promote self-employment and the growth of domestic small- and micro-businesses. Based on methods of analysis, synthesis, and generalization, as well as scientific abstraction, we can conclude that domestic MFOs are beginning to fill the gap in financial services for the population and small businesses in situations where credit services from banks and other financial institutions are unavailable or unaffordable. Despite the positive impact of MFOs on the domestic economy, there is room for improvement in their operations. Currently, microfinance institutions (MFIs) are unable to fully meet the demand for financial services, due in part to their limited resource base. MFIs could address this challenge by independently increasing the fees for services they provide, which would negatively impact the affordability of their services and consequently hinder their ability to expand the range of financial products they offer to potential customers. In order to promote the further development of MFIs and enhance access to financial services, we propose implementing measures to significantly boost the resource base of these institutions by providing them with more affordable funding.