Microcredit: how to define it and what are its challenges?
Are you looking for a way to support yourself in the short term? You do not wish to go through traditional financing organizations such as your bank, and wish to obtain an answer adapted to your needs? Discover microcredit, a modern and practical solution in all circumstances! We invite you to learn more about this modern funding lever and to understand both its challenges and its goal.
Historical approach: the development of microcredit in the world
You probably know the name of this new means of financing. But do you know what it really is and where it takes root? Here is a historical overview of the path he led before modern structures appeared, like the professional in the field, which offers you access to micro credit 100% online.
More modest origins
Before arriving in emerging countries, microcredit was intended for populations who did not have a sufficient source of income to support themselves, and by extension to carry out projects. Then begins a large collection of money by the government and the establishment of a budget that would make it possible to give a micro loan, which is more modest than those weighted by the banks.
It then becomes easier to satisfy the needs and the populations go up and create professional projects like micro enterprises to improve living conditions, or create jobs in a sustainable manner in many sectors. Having proven themselves, many networks develop and come together to become a real structure imposing on perennial resources.
Access to micro credit is easier than a loan borrowed from the bank because the structures do not ask you to justify your loan request. As such, it is true to think that micro credit can be the key to the birth of many projects.
His arrival in transition or emerging countries
Given the development of this new economic model, many companies see their interest in offering microcredit. It therefore appears in Europe, first in countries with low GDP, before reaching France and the rest of the continent fairly quickly from the 19th century onwards through the workers’ movement.
The French government is developing more than one structure to facilitate access and make it a real plea on social networks or its personal site. The structures that we know to date are:
- Any organization that has money and can allocate it in exchange for a refund and fixed interest rates. We are thinking in particular of the banks which are starting to democratize its system, because they see in it the advantage of involving young consumers or profiles who cannot afford a conventional loan.
- Associations which help the most deprived. These include those who wish to promote the social, professional and physical reintegration of the borrower into society. The best known association is the ADIE: the Association for the Right to Economic Initiative.
- Dedicated platforms which aim to carry out a participative microcredit for the creation of projects, both real estate and humanitarian.
- Finally, since the success seems growing and promising, specialized companies are constantly being created. Their goal is to compete with responsiveness and modernity for rapid funding. It is the most modern solution!
Today, microcredit is said to have gone beyond the stage of a simple financing solution for the less fortunate, but is aimed even at the wealthiest classes.
Does microcredit only preserve the simple definition?
It is more than difficult to give a simple definition to microcredit, because it can take variable forms depending on its use and who benefits from it. From his story, we can no doubt draw the following conclusions:
Microfinance accessible to all, but not only …
Its constitution, and what it does that it is so acclaimed by each country, undoubtedly rests on the following qualities:
- A modernized means of financing. Today, it is not present / given to only one category of people. Whether you are a student, employee or freelance, microcredit is given more easily to those who wish to carry out a personal or professional project
- Provided that the beneficiary has a bank account and that his situation is regularized if you make your request in France;
- Unlike a request for a conventional loan from the bank, you do not have to justify your professional or private project to those to whom you apply
- Simplified procedures for obtaining an accelerated micro loan. Thus, you are more likely to bounce back and carry out your project within a given time;
- It can be a credit for you as well as for a third party. For example, if you decide to invest in a real estate, cultural or social project in which you believe. Microcredit can be turned towards humanitarian aid!
Defining microcredit in a single sentence is difficult as its conditions and uses are complex!
A definition for a project?
It is true that if you are applying for a microcredit, it is because you are surely in the demand for a micro loan immediately. And the reasons can be multiple!
Student life can be fraught with pitfalls, and planning is good. Except that sometimes last minute events happen! Your computer is broken, your car has just broken down, you have a flood or fire in your apartment, etc. So many incidents that will ask you to pay the fees quickly. And what about tuition fees, sometimes too expensive and which must be paid within a month!
If you are looking for your first job, why not start your own business? The microenterprise is not trendy: it is above all the best solution to start your business in the short term.
Micro credit is the solution for all profiles looking for a small amount of funding for a limited commitment period and a short-term repayment! If you want to know all the secrets of microcredit, come learn more on this site!