Microfinance is the viable and sustainable provision of a broad range of financial services to poor and low-income individuals engaged in livelihood and microenterprise activities. It uses nontraditional and innovative methodologies and approaches, namely: the extension of small loans, simplified loan application procedures, group character loans, collateral-free arrangements, cash flow-based lending, alternative loan repayments, minimum requirements for capital build-up (CBU)/minimum balance retention, and small denominated savers' instruments aimed to improve their asset base and expand their access to capital and savings. (Sec. 3(f), R.A. No. 10693)