Micro-credit lenders typically provide entrepreneurs with small, short-term loans; on the small or “micro” scale for which they are intended, these loans are quite effective at allowing rural and urban poor in developing nations to establish sustainable businesses. At a certain point, however, these micro-loans are ineffective in stimulating further growth. The small size of the loans cannot support growth beyond a certain scale, and the short duration does not allow the capital to work for an extended period of time.
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