Ask a Teacher



WHAT IS MUTUAL FUND AND MICRO FINANCE?

A mutual fund is a type of professionally-managed collective investment vehicle that pools money from many investors to purchase securities .The term mutual fund is less widely used outside of the United States and Canada. Mutual funds are classified by their principal investments. The four largest categories of funds are money market funds, bond or fixed income funds, stock or equity funds and hybrid funds. Funds may also be categorized as index or actively-managed.
Micro finance is usually understood to entail the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. The two main mechanisms for the delivery of financial services to such clients are (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group.


comments powered by Disqus