Due to the limited guarantees of repayment, the amount of consumer credit today is usually limited to the size of 10 – 20 thousand hryvnias (on average – 15 thousand hryvnias), which is why it is called micro-credit (micro-loan), a private loan.
But, as a rule, such an amount is usually enough to solve most of the sudden (urgent) financial problems that arise in the vast majority of ordinary people. For this reason, micro-loans are invariably popular with the general public. In fact, it is a banking analogue of the very popular lifestyle of “debt-to-pay”.
How do microloans work?
To understand how microloans work, you need to answer the following questions.
- What are bank micro loans for? The need for microloans usually reflects the emergence of sudden difficult situations in our lives, when a limited amount of money is urgently needed and nowhere to take. By the way, no one is safe from such difficult situations. What are their most common options?
- Sudden serious illness or accident. This is usually associated with hospitalization, and treatment is known to be very cheap today.
- Accidental damage to housing. For example – a breakthrough of water supply, sewerage, fire, damaged roof … In such situations, money is usually needed to perform urgent restoration work – because you need to live somewhere.
- need for urgent purchase. For example, suddenly broke down some technique without which modern life is no longer possible – for example, a car, a refrigerator, a computer, a mobile phone …
- Urgent compensation for damage (debts) to third parties. possible variations of situations – “hit” someone else’s car, it is necessary to “peacefully” settle a domestic conflict, it is necessary to pay in a restaurant, casino …
Microloans on the map around the clock
The main features of the MFI’s work are the following:
- For MFI applicants, they actually only exist on the Internet, in the form of relevant websites. The communication between the applicant (individual) and the creditor (MFI) is conducted remotely using the tools of the website, e-mail and mobile telephone communication. Therefore, it is not necessary for an applicant to go and spend their time to obtain MFI micro-credit – it is enough from any computer or mobile gadget connected to the Internet to go to the MFI website and, there through its interface, independently perform the work of applying for a loan application .
- The work of MFIs is based on the maximum automation of information processing (about the applicant) and the development of financial decisions for issuing loans. Living MFIs are the bare minimum. The main array of work is performed by machines – computers and computer programs, capable of working constantly (around the clock). Therefore, 24/7 provision of micro-credit services, including weekends and holidays, is a distinctive feature and an important competitive advantage of MFIs.