Question: Question 4 Microfinance has been praised as a strong tool for fighting poverty and building wealth. It is not surprising then that microcredit through microfinance

Question 4

Microfinance has been praised as a strong tool for fighting poverty and building wealth. It is not surprising then that microcredit through microfinance institutions has become a common feature of the business world in Kenya and other developing nations. However, credit carries with it the risk of default, and worse still, the risk of non-payment of loans. What legal mechanisms protect creditors (or should protect creditors) from the risk of losing money through unpaid loans? (Note: You can expand your response to cover non-legal mechanisms too.) (10 Marks)

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