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Micro- Finance

Microfinance, also called microcredit, is the provision of small credit to the low-income individuals or groups who otherwise would have no other access to financial services. The term ‘missing middle’ is often used for this section of our society who lost out on formal credit for want of a collateral support. It is here that Microfinance steps in, providing ‘micro’ credit with no collateral whatsoever.

Outside of these microfinance providers, there exists a strong ecosystem of other stakeholders including the regulators, the Government, financial institutions, credit bureau, employee bureau, rating agencies and others which play an important role in the delivery of Microfinance.

 

General Features 

 

Short-Term Loans

·    Loans are issued in compatibility with the client’s household cash flow

·    Loans are also issued keeping in mind the client’s comfort level of giving a mutual guarantee to the other people in the group

·    The minimum loan size of the first loan is a way of testing the clients and the market as well as limiting the company’s exposure to risk

·    Based on the client’s demands and business needs, newer products with higher loan amounts and tenure will be introduced with time

 

Emergency Loans​

·    These loans are provided to clients to reduce the impact of borrowing on their main assets

·    The loan can be availed during emergencies such as death, sudden illness or any other similar emergencies

·    The loan must be repaid within twenty five weeks at the same interest rate

·    The loan can be repaid in either 12 fortnightly installments or 6 monthly installments

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