Microcredit is a small loan to a borrower who has difficulty obtaining financing from traditional banks. Who can claim? What advice to follow to take out this type of loan?
Micro credit: what is it?
Popularized in Asia by the Stalen Bank, micro credit arrived in France at the end of the 1980s in the form of a mini professional loan for entrepreneurs with very low incomes wishing to create and develop their own company. But since the 2000s, the personal micro-credit and consumer microcredit are the forms that develop the most in the territory.
The characteristics of the micro credit:
- Its amount is generally between 500 € and 5000 €, but can in some cases be increased to more than 10 000 €;
- Its repayment period ranges from several months to several years depending on the amount borrowed;
- It is offered at a fair and competitive interest rate ranging between 1.5% and 5%.
Who can claim a micro credit?
The micro-credit is aimed primarily at people who are traditionally excluded from the banking system: the unemployed, precarious workers, students, the elderly at least old age, people with disabilities, and other recipients of social minima. This financing solution may also be of interest to people “between two waters” who have incomes too high to receive social assistance, but too weak to have the favor of their bank.
How to get a micro credit?
You do not have to go to your traditional bank to subscribe to a micro-credit: the borrower has to go through a social support network that will help him build his application file and then submit this file to a banking institution approved by the Social Cohesion Fund. The network also monitors the borrower for the duration of the loan.
This social support network can be:
- an association with a social vocation (fight against exclusion, professional integration);
- a municipal social action center in association with the town hall or Pole Emploi;
- a district control or a territory control.