Microfinance cash credit refers to a financial service provided by microfinance institutions (MFIs) to individuals, small businesses or entrepreneurs who typically do not have access to traditional banking services.

Purpose:
The main purpose of microfinance cash credit is to provide small amounts of credit to low-income individuals and micro-enterprises to support their business activities, purchase inventory, meet working capital needs or deal with emergencies.

Structure:
It typically works like a revolving credit facility where borrowers are given access to a certain credit limit. They can withdraw funds as needed, repay them and withdraw again, similar to a credit line.

Collateral:
Unlike traditional loans, microfinance cash credit often operates without the need for traditional forms of collateral. Instead, MFIs may use alternative methods such as group guarantees, peer pressure or social collateral to reduce risk.