Microfinance Models Based on Traditional Lending Practices

The paper discusses how conventional lending frameworks can be applied to the modern microfinance models to enhance the financial inclusion of the underserved communities. There was the mixed methods approach, which included 200 rural and semi-urban borrowers. Findings revealed that rotating savings and credit associations (ROSCAs) represent the most widespread traditional lending system, and hybrid microfinance models have a major positive effect on the rate of repayment, financial literacy, and customer satisfaction. Nevertheless, such issues as regulatory bottlenecks, urban scalability and dependence on social networks must be overcome to implement it sustainably.