Loan features – including size, collateral requirements, and repayment terms – are typically more flexible than those of standard bank loans and are tailored to the needs of low- and moderate-income entrepreneurs. In the United States, however, credit is only one part of the microfinance package.
The financial markets are already flooded with liquidity, but in the midst of high uncertainty and financial deleveraging its effects in boosting investment and consumption still fall short. In fact, the available policy space may be quite limited in advanced economies, where interest rates are already near zero and fiscal consolidation is necessary to keep sovereign debt sustainable.