Many countries around the world have a worrying rate of poverty where both food and financial sources are disturbingly limited. Most of the world's poor have suffered due to the deficit in the use of financial services. Due to a bad credit history or lack of proof of employment, financial services are very often not accessible to the low-income customer market. In Western and developing countries, people are being pushed out of the traditional financial system due to lack of collateral, unaffordable costs to process their loan application, and lack of data regarding their credit history. These factors sometimes lead to borrowing illegally and neglecting lending regulation. Microloans are designed to break the cycle of poverty by allowing low-income residents access to external funds, from which they were previously limited. These funds give you the opportunity to participate in investments, such as small businesses, and create a steady stream of income. Microlending provides financial services to those who may have little or no income, as well as not having the official documents required to apply for a regular loan. With the aim of low interest and easy application, microlending seems to be the most efficient alternative way to alleviate poverty. To help gain a better understanding of microlending; we will explore the history of microfinance and its organization, poverty and the target subject of this organization, as well as the benefits and negative effects of providing these services. The origin of microfinance can be observed until the end of the 19th century. Friedrich Wilhelm Raiffeisen first conceived the idea of ​​cooperative self-help after observing the suffering of farmers around the world...... middle of paper......can provide borrowers with a steady stream of income that It can help you repay the loan and become eligible for any type of banking service. If microfinance institutions build themselves successfully enough to offer more services to the low-income customer market and have the financial comfort to offer interest adjusted to customer income, they could be one of the strongest forces in alleviating poverty. If institutions are built well enough to break even or make a small profit, they become a huge profitable investment for businesses and wealthy investors. When run as sister companies to other businesses or by external lenders on an online site, microfinance institutions can provide opportunities, education and a healthy income stream to poverty-stricken people for the rest of their lives and slowly help alleviate poverty.