Microfinance is a kind of business loan with individuals or families as the core, and its main service targets are the self-employed, small workshops, small business owners and small and medium-sized micro-business owners. The loan amount is generally less than 654.38 million yuan, 1 10,000 yuan or more. Micro-credit loan is an extension of micro-credit in technology and practical application. The borrower does not need to provide a guarantee. Its characteristic is that the debtor can get a loan only by his own reputation without providing collateral or third-party guarantee, and the borrower's credit degree is used as repayment guarantee. Because this kind of loan is risky, it is generally necessary to conduct a detailed investigation on the borrower's economic benefits, management level and development prospects in order to reduce the risk.

Microfinance is a small continuous credit service for low-income groups and micro-enterprises. Micro-credit has changed the traditional financial transfer payment method by providing micro-loans and exerting the financial incentive and restraint mechanism, and is an effective financial poverty alleviation method.