Lending and poverty alleviation are often two of the least glamorous businesses out there.
But together they are a novelty that has become popular and in demand. This innovation is microcredit, and it involves providing small loans to people in financial difficulty.
Microcredit is becoming increasingly popular, not only in emerging countries, but also in Canada. With microcredit, entrepreneurs with less available capital can finance their way to financial independence.
In this article we will show you why to choose a microcredit and what are the considerations you should take into account to do so.
What exactly does a microcredit mean?
Microcredit is a basic financial service, intended for people with limited financial resources.
Because microcredit financial services typically involve modest amounts of money, the term microcredit has come to distinguish these services from those typically provided by traditional banks.
Microcredit helps very poor households meet their basic needs and protect themselves from risks.
The use of financial services, by low-income households, is associated with improved household economic well-being, and business growth or stability.
Reasons to choose a microloan
Whether you are facing an emergency financial situation, or you have a business idea in mind that you believe can work, microloans are the ideal option because they offer interesting benefits:
The loan review, from a small business lender, is much faster than a bank loan.
Many loan companies offer their services online and the borrower can get the funds as soon as possible.
Loans from microfinance companies are much faster than bank loans. Some lending companies apply for credit loans and the borrower can get the funds as soon as possible.
For people who need funds urgently, it is much better to apply through a loan company.
Compared with bank loans, microloans are basically unsecured, and the barriers to entry are much lower.
To apply for the bank flow loan, you only need to provide information such as ID card, bank flow, personal address certificate, personal work certificate and a personal credit report.
For example, at Mon Petit Prêt you only need to fill out an online form, no other paper information is required. The information is simple and the procedures are convenient.
In general, the lender can obtain funds after submitting application materials and signing a contract.
In contrast, in banks the review process will be longer, because there are more logistical and bureaucratic procedures. Small loan processing saves the lender a certain amount of time.
Higher approval rate
Compared to banks’ stricter requirements for borrower qualifications, microfinance companies have less stringent requirements for these purposes.
While personal information and credit checks are required, different rates will be introduced for various borrower situations. For example, increasing interest rates on loans for clients with bad credit.
This is in contrast to a bank loan, where a small blemish in the credit investigation is enough for the bank to refuse to lend and take risks.
Under normal circumstances, borrowers with bad credit have higher borrowing rates. Of course, if the credit status is extremely bad, it is not easy to get a loan.
Wide range of loans
Microfinance companies have a wide selection of products and a diverse range of uses.
Depending on the different loan products, depending on the various borrowers, they can be used for:
- Fixed asset investment loans.
- Project loans.
- General fixed asset loans.
- Loans for medical emergencies.
- Working capital loans.
- Loans for initial working capital.
- Temporary working capital loans.
- Revolving loans.
- Personal consumption group loans.
- Home mortgage loans.
- First-time home loans.
- Second-hand home loans.
There are limited options for borrowing from banks, but there are many options for borrowing from small business lenders.
Different loan products will be developed, according to the various borrowers, with flexible forms.
At Mon Petit Prêt, borrowers can choose the right amount, term and rate to manage the business, according to their own needs.
The client can now apply for a cash loan. If the microloan is approved, his card is replenished. If it is rejected, he can try again after a while.
Mon Petit Prêt is loyal even to those who do not repay the loan the first time. For such cases, it is possible to extend the final due date.
It is enough to pay the fee and set a new date. But this time it is important to repay the microcredit on time, because otherwise, in the future, the debtor will surely have problems in obtaining other loans.
Online microcredit is a modern solution to temporary financial difficulties. Lower interest rates and customer-oriented service make Mon Petit Prêt stand out from other microfinance organizations and banks.