Micro-credit, Micro-finance

Micro-credit is understood as the provision of small loans to individuals, to help them finance income-generating activities or set up small businesses. In Canada, much of what is practiced in micro-credit has been learned from the experience of the Grameen Bank in Bangladesh, and from the pioneering work of the Coady Instititute.

There are many forms of micro-credit in Canada, from the peer based model of Grameen, to immigrant loan funds provided by many settlement agencies in partnership with financial instititutions, to individual character based loans provided by community loan funds and credit unions.

Source  Microfinance.ca 

Micro-credit

Refers to loans under $25,000 made to entrepreneurs who typically cannot access traditional forms of commercial financing for their businesses.  These loans are generally paired with business training and technical assistance. 

Source: Scan of the Community Investment Sector in Canada, Coro Strandberg, Brenda Plant, September 2004.

 Microfinance

"Microfinance is the supply of loans, savings, and other basic financial services to the poor." (CGAP)?As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term "microfinance" helps to differentiate these services from those which formal banks provide.

Source  Kiva.org

Microfinance has evolved internationally as an economic development approach intended to benefit low-income groups. The term refers to the provision of financial services to low-income clients, including the self- employed. In the UK, microfinance organisations primarily provide loans but the term worldwide covers the provision of financial services more generally, including savings and credit, insurance and payment services.

Microfinance clients are typically self-employed, low-income entrepreneurs in both urban and rural areas. Clients are often traders, service providers, small restaurant operators, artisans and small cottage industries.

Usually their activities provide a stable source of cashflow and income (often from more than one activity).Patient Capital Patient Capital is a subordinated loan (see definition below) that is made in the expectation that repayment may take one or two years to commence – the investor must be patient. Standard terms normally include capital repayment holidays of 1-2 years with scope to offer additional grant or reduced interest rates early on to boost ability to repay eventually.

Source: The Social Investment Bank, The Commission on Unclaimed Assests, UK: March 2007

Microfinance Institutions (MFIs)
Typically associated with local financial intermediaries in developing or transitional economies, MFIs provide very small loans to informal sector microenterprises. Microfinance institutions may be non-governmental organizations, specialized regulated financial intermediaries or full commercial banks and some provide financial services to small businesses in addition to microenterprises. In most instances MFIs connote a distinct stand-alone financial intermediary, but in other instances they may be a department of a larger commercial bank or development programme.

Source: World Economic Forum: 2008 Blended Value Investing: Capital Opportunities for Social and Environmental Impact,