- It seems like the same and people get confused in these words. Both are related to finance but the target market for both is different.
- Micro finance is specially framed for the need of an individual, a small industry or any type of small business unit.
- Macro finance is designed for the large section of the economy like big business corporations or a whole economy.
- A micro finance is a narrow concept which includes the various services like micro credit, micro savings, micro insurance and many more schemes.
- The purpose of micro finance is to help the small section of a society like low-income level people or a below poverty line who are not able to serve their needs just because of unavailability fund.
- Those who are not able to take a financial help by the conventional way of putting a security as a guarantee.
- A micro finance helps people to start their own business by proving finance with a low rate of interest and help to make them independent.
- Macro finance is a broad concept and works on a large scale and its advantages are widespread.
- Macro finance is an initiative which deals with the large section of an economy and covers all the financial need and how to provide it to the needed one.
- A macro finance includes the drafting policy, subsidies, multi-year expansion plans.
- The main aim of macro finance is to help an economy to grow and to generate employment and expand an economy.
- A government provides macro finance in any form to the business like tax benefits or a subsidy because it will benefit the economy in future.
Difference between Micro finance and Macro finance
|Basis||Micro finance||Macro finance|
|Meaning||Micro finance is an individual based concept to furnish financial services to low-income individuals who have no access to finance in a conventional way.||Macro finance is a whole economy based concept, which is not framed for any particular group, to grow the economy at a national level.|
|Concept||A micro finance is a narrow concept and focuses on the need of an individual.||A macro finance is a broad concept and focuses the whole nation.|
|By whom||A micro finance is provided by micro finance companies, self-help groups, and non-government organizations.||A macro finance involves a large entity like governments, big corporation, banks, and some big private lenders.|
|Money involved||In micro finance, the money involved is in a small amount.||The amount of money involved is in a large portion.|
|Time period||A micro finance is an endless activity which goes on and on.||A macro finance is for a specific time period like 2 years or a 3 year. It means it has a predefined tenure.|
|Risk level||In a micro finance, there is a risk of default that an individual may not pay.||There is no risk at all because the main aim is to give benefit to the economy.|
|Effect||A micro finance has a direct effect on an individual.||A macro finance has a direct effect on the whole economy which indirectly affects the whole population.|
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