Microfinance's Definition

Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.

More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers." Those who promote microfinance generally believe that such access will help poor people out of poverty.

Microfinance is a broad category of services, which include microcredit. Microcredit can be defined as the provision of credit services to poor clients. Although microcredit by definition can achieve only a small portion of the goals of microfinance, conflation of the two terms is epidemic in public discourse. In other words, critics attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and no studies to date have done so.

Source: http://www.answers.com/topic/microfinance