On a world wide scale, many borrowers apply for short term credit products and services. The microfinancial market is responsible for serving millions of borrowers who are otherwise excluded from traditional financial services. The gap between credit worthy borrowers and non credit worthy borrowers is narrowing. Currently, only one out of three people in the world is financially literate. From 2011 to 2014, the number of men who have an account with a financial institution rose over 9%. For women, this number rose by more than 10%. Short term credit providers supply working class citizens who are going through cash flow shortages with a chance to make an informed financial choice. Borrowers who have the ability to build savings, own a house, and manage a budget can participate in economies and realize their full potential. Slowly, MFIs and microborrowers are removing the barrier which stops them from becoming financially literate.
Like with any contract, sticking to the rules is crucial for both the lender and borrower. Some short term creditors profit from unfair practices including expensive roll over charges. In America, four out of five short term or payday loans are rolled over or renewed within 2 weeks. Thus, when a lender takes advantage of this statistic by charging an excessive amount for breaking the loan terms, the industry as a whole is criticized. Therefore, regulation and reporting has begun to measure the world's microfinance institutions performance. Collections of global impact reports, industry certifications, and social ratings are now being monitored by a global consumer protection agency who work for fairer lending standards and practices. Similar to building up borrower's credit history, MFIs are building up a strong foundation based on client protection principles.