GET A LOAN FROM A MICROFINANCE BANK IN NIGERIA

Easy Ways to collect/service loans from Microfinance bank in Nigeria

Hossain (2001) defined micro finance as a practices of offering small, collateral-free loans to people who otherwise would not have access to capital to begin small business or other income generating activities.

Conroy (2003) defined micro finance as the provision of finical servic

e to poor and low income house hold without access to formal financial institution. Micro finance is a general term to describe financial service to low income individual or other who don’t have access to typical banking service.

According to CGAP (2011) Microfinance offers poor people access to basic financial service such as Loans, serving, money transfer service and micro insurance. People living poverty, like everyone else, need a diverse range of services to run their business, build assets, smooth consumption and manage risk. With all this why do people still find it difficult to get financial assistance from the bank?

Target Customers

The bank’s target market is aimed mainly to economically active poor women and in rare cases men who are deprived, vulnerable and tend to engage in small economic activities which can be supported by small loans. These activities contribute to the local economy by providing useful goods and services and improving the condition of in households, particularly those of children in terms of nutrition, health education and general welfare. Here are the easy step to secure a loan and even pay off without stress

Group Formation

A group consist of five to thirty depending on their product. Belonging to a group is not new in Nigeria because many people are already members of a group, either in the church or within their immediate community and so the concept of a group is not new to us, but what may be new is that we may not be aware theses our groups should be use more for economic benefit and less for social benefit, the group should consist of individual who has something in common they either come from the same community, same religion or same age group or market.

For an individual to belong to a group or be recognized as a customer of the micro finance bank, the following criteria must be met:

1) The Customer must be engaged in an income generating activity: This means each and every one in the group must have something doing, not like the bank is giving you money for charity

2) The age limit is between 20 to 25 years: This is an economic activity for improving lives so is not a child play.

3) Other group member must attest to the fact that the customer is of good behavior: this aspect is very important because if your group can defend for you, then how do you expect the bank to give you loan

4) Two account must be open for each group namely compulsory saving and loan account with a non-refundable account opening  deposit of 400 or above depending on the bank each on the respective account and will be jointly run by the group leader and secretary of the group in behalf of the other group member

 Product description: These products is made available to members of a group or association (register or unregistered) involved in activities whose risk profile are considered acceptable to the bank, however those that don’t fall into the above would be treated on a case by case basis. The products will be driven to represent not less than 80% of the bank’s total loans portfolio at any point in time. The product encourage group lending which encourage compulsory saving along with repayment of the loans facility granted. The minimum amount that can be giving to is N200, 000 for basic while the maximum is N500, 000 respectively for a maximum of 180 days of 24 weeks

Requirement:

Group account to be opened with the bank

Group membership will be a minimum of 5 to 10 members for the TL (Thread Loan) and a maximum of 5 to 30 members for the SL (support loan)

The maximum exposure of the bank per each borrower in a group is paged at N200, 000 (two hundred thousand naira) for tread loans and N500, 000(five hundred thousand naira) for support loans.

The payment period will not exceed 180 day or 24 weeks

Compulsory saving account must be maintain and the account must not have less than 10% of the amount requested for.

Repayment must be done on weekly basis and on a specific day of the week which will be agree by the group during their meeting, the loans office together with the group pick a date and time of meeting.  

All disbursement must be routed through the group account inclusive of repayment

Group guarantee are required

Voluntary saving would be a minimum of 10% of the week loan repayment amount and must be paid with weekly loan repayment

you can revitalize your business by getting loans from micro finance banks, its easy, just follow the steps above!!!