Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment and a verifiable credit history limitation of both sides. image left It is designed not only to support entrepreneurship and alleviate poverty, but also in many cases to empower women and uplift entire communities by extension. Microcredit is a division of microfinance, which is the provision of a wider range of financial services, especially savings accounts, to the poor. The United Nations declared 2005 the International Year of Microcredit. As of 2012, microcredit is widely used in developing countries and is presented as having "enormous potential as a tool for poverty alleviation." Microcredit is ideally based on a unique set of principles that are readily distinguished from trends in the wider credit market. Microcredit organizations were initially created as alternatives to the "loan-sharks" known to take advantage of clients. Indeed, many micro lenders began as non-profit organizations and operated with government funds or private subsidies. By the 1980s, however the ‘financial systems approach,’ influenced by neoliberalism and propagated by the Harvard Institute for International Development, became the dominant ideology among microcredit organizations.