Abstract: Microfinance is the provision of financial services to low-income clients, including consumersand the self-employed, who traditionally lack access to banking and related services. More broadly, itis a movement whose object is “a world in which as many poor and near-poor households as possiblehave permanent access to an appropriate range of high quality financialservices, including not just creditbut also savings, insurance, and fund transfers.” Those who promote microfinance generally believethat such access will help poor people out of poverty. Microfinance is that part of the financial sector which comprises formal and informal financial institutions, small and large, that provide small-size financial services to all segments of the rural and urban population, in practice however mostly to the lower segments of the population. Micro finance cover a wide array of microfinance institutions (MFIs),ranging from indigenous rotating savings and credit associations and self-help groups to financial cooperatives, rural banks and community banks as well as non –banking financial institutions (NBFIs) including credit NGOs, all the way up to development banks and commercial banks .