For ministry in Africa, Asia, or Latin America:

• Microfinance Institution (MFI) — An organization that provide financial services to the poor for a fee operating like a bank but targeting low-income entrepreneurs who are not able to access banking services.    Often run by Christian relief and development organizations, an MFI is sometimes legally prevented from holding the savings deposits of the poor and tend to focus on providing loans (i.e. microloans).  Some countries do allow an MFI to offer savings facilities and insurance.
• Rotating Savings and Credit Association (ROSCA) — An informal financial system within microfinance in which members’ agreed-upon savings contributions are collected at an agreed-upon time and rotated, in turn, to each member.  No outside money is involved, only member savings.
• Accumulating Savings and Credit Association (ASCA) — An informal financial system within microfinance in which members agreed-upon savings contributions are collected at an agreed-upon time and can be used to finance loans, insurance and/or other financial services.  Unlike a ROSCA, member’s savings contributions accumulate over time and can return a dividend to members.  Many ASCAs are designed to last for a few months.  Those that seek to last indefinitely usually become registered credit unions or cooperatives.  No outside money is involved, only member savings.
• Microcredit — Making small, typically non-collateralized loans to poor people. Microcredit is one service often provided by MFIs as it is one component of microfinance, but it is usually most appropriate when poor households have adequate cash flow to repay loans. This cash to repay can come through a microenterprise or other income sources. Poorly done microcredit can bury poor households in debt, causing loan payment defaults and damage to implementing institutions.

For ministry in the US and Canada:

• Individual Development Accounts (IDAs) — Matched income accounts that allow economically poor households to build an asset base. This financial ministry tends to have deep impact by coupling the triumph of asset accumulation with financial literacy training and counseling. Learn more about the Chalmers Center's IDA Initiative for churches.