A microfinance bank is a type of bank that offers small loans, to individuals, entrepreneurs and small scale businesses. The main function of these bank is to provide opportunities to loan money where by small amounts of money can go a long way. Simply put microfinance banks ultimately provide credit to those who are unable to access the type of capital needed to develop businesses or to start up their entrepreneurial dreams.
In some cases, microfinance banks there aim is to promote growth and development in low-income areas by investing it into the social development of the region. By doing all this these banks still make a profit of the loans, their major focus is to promote growth through the provision of some kind of resources including financial and business advice.
Micro finance refers to a variation between upper and lower limits of financial products such as micro savings, microloans and micro insurance products. micro finance institutions gives to their clients.Some of the most entrepreneurs and small business owners have a huge of knowledge and ideas for their businesses, very few of them know the right amount of capital to support their business ideas. That is the exactly why receiving a microloan is most suitable option for startups or businesses that need less money than a normal bank would lend.
A microloan is also called micro-credit, is a loan of a small amount for the most part to help small to medium sized enterprises, entrepreneurs, and private individuals to finance their business demands or private investments. A microloan is usually mention to a loans that usually the area of variation between upper and lower limits on a particular scale for example ₦15,000 to ₦2,000,000 and is offered by banks as well as micro finance institutions around Nigeria.
The major macro finance bank in Nigeria are: RenMoney MFB, Lapo Micro finance Bank, or AB Micro finance Bank. Most of the micro finance banks have different branches in Nigeria, some of their branches are located in Nigeria’s biggest cities like Lagos, Port Harcourt, Abuja or Ibadan, while most of the smaller micro finance banks for the most part of Nigeria operate only in some city or in specific rural areas. Some of the banks in Nigeria are very traditional given loans, only in the microfinance bank office, while some other microfinance banks offer online applications for extremely small loans. Some microfinance banks are even sending a representative direct to your office or your home to pick up your documents that are needed to get a loan.
In most of the cases, micro finance banks in Nigeria offer loans range between ₦20,000 and ₦2,000,000 with an interest rate starting from 2.38-5.00% per month. These banks are available in most of the cities across Nigeria, some of them provide microloans without collateral.
The good news is that most of the micro finance banks will offer loans without any collateral needed. In order for you to successfully receive a microloan from these banks, the sad part of this is that you will be earning a salary of at least ₦50,000 per month and you must be in full-employment for at least a year. When requesting a micro finance bank for a loan, they will carry out a perfect check that is why it is so necessary to tick the boxes on all of the higher requirements.
Many people always ask themselves this question is macro loan the right choice for me? i will say yes If you are a trustworthy and honest person with a good dream to start up a business or organisation but you don’t have the ability or income to do so, then a microloan is what you need. The loan will allow you to borrow just the right amount of money you think to can start with without putting you into debt. To make sure that you get approval for your microloan, remember that the way you present yourself is a reflection of the way you handle your business and your finances.
Here is my advice for informationhood readers make sure your demonstrate your ability to pay back the loan through positive statements and experience in your interest. You will also be able to provide a good idea and you will also be able to provide strong references and records by clearly show the existence or truth of your honestly and trustworthy.