The provision of financial services (including loans (known as microcredit), savings products, insurance and remittance services) to low-income clients who would not otherwise have access to such services. The clients may have limited access to mainstream financial services because of geographical or infrastructure limitations, or their lack of collateral or formal credit history.

Muhammad Yunus is generally credited with launching the modern microfinance movement in the 1970's. Yunus and Grameen Bank (the bank founded by Yunus) were awarded the Nobel Peace Prize in 2006. For more information, see Practice note, International investment in microfinance: overview.