Which of the following best describes microloans?

Microloans are specifically designed to provide small amounts of capital to individuals or small businesses, particularly those classified as micro-enterprises. These loans are characterized by their smaller size compared to traditional loans, making them accessible for entrepreneurs who may lack access to larger financing options.

Microloans aim to support those starting or growing small businesses, often in underserved communities, making it easier for aspiring entrepreneurs to access funds needed for inventory, equipment, or operational costs. This targeted assistance fosters economic development by enabling individuals to start businesses that can sustain themselves, create jobs, and contribute positively to their communities.

Other types of options—such as large loans, government grants for unrelated educational purposes, or high-interest loans from traditional banks—do not fit the description of microloans, which focus on small, manageable amounts meant specifically for micro-enterprises.