Microcredit is a concept first experimented with in Brazil by Accion International. Contrary to popular belief and expectations, it turned out that poor people with little or no financial security paid back all of their loans at a rate better than the conventional rate of most commercial banks.
It was then given a new dimension after a young professor at Chittagong University, Muhammad Yunus started Grameen Bank in Bangladesh. He won the Nobel Peace Prize in 2006 for his extra-ordinary success with microcredit in poverty alleviation in Bangladesh and many other countries. Grameen Bank today is a part of the great Grameen Foundation which serves various sectors in Bangladeshi society. Grameen has also partnered with other multinational companies(such as Danone, the French Yogurt Company) to serve poor people better.
Microcredit has turned to be a miracle compared to the inefficacy of hundreds of billions of aid and charities poured out to poor nations in the past centuries.
The following video featuring Muhammad Yunus will help you understand the concept of Microcredit better.
