The needs of representatives of modern society often require tangible costs and investments. Of course, not every citizen has an income level high enough to cover any needs without auxiliary resources. It is in this case that microfinance organizations become relevant. Such companies make simple and quick lending possible.
What is meant by microfinance organizations
There are many different structures whose purpose is the implementation of various financial transactions. The issuance of loans or loans is one of the most common areas of activity of such companies. Answering the question “microfinance organizations - what is it?”, It is worth noting the following fact: the activities of such structures are actually completely similar to banking. The difference lies in the regulatory system, work rules and regulations, on the basis of which such companies issue funds.
In fact, microfinance is aimed at providing various services that are relevant both for entrepreneurs opening their own business, as well as for average citizens. The advantage of such companies is that they can issue certain funds without a credit history and many conventions that take place in banks. This means that in microfinance organizations it is much easier to get money. It is important to understand the following fact: the activities of such organizations are supported by the state, which has a direct impact on the level of trust in them. Therefore, those who ask themselves questions about whether microfinance organizations are reliable, what it is and whether it is worth using these services, you can safely contact these structures, since they are completely legal.
More details about reliability
One of the best ways to determine whether to trust a particular microloan company is to refer to the rating of organizations of this profile. This can be done using the services of a rating agency, for example, Expert RA. Such information will help you find out which companies faithfully fulfill their current financial obligations.
The value of this assessment lies in the fact that it is independent, which means it is objective and, as a result, reflects the real situation. In this regard, do not neglect the individual rating of companies operating in the form of a microloan.
What the townsfolk should know
First of all, every company that falls into the category of microfinance organizations should be included in the State Register. To find out if there was a fact of registration, it is worth visiting the official website of the Bank of Russia, on which these data are freely available. Moreover, it does not hurt to pay a visit to the office of a particular MFI. It is there that the certificate of registration in the State Register should be placed.
Important information on existing responsibilities
In fact, any state microfinance organizations and private companies have certain obligations to customers:
- Each MFI should use one tabular contract form when issuing loans, without changes.
- Any company has an obligation to announce to its customers the full cost of the loan. This means that every citizen has the right to know what percentage he will have to overpay during the entire loan repayment period. Such information is very useful when choosing a specific offer. Another important fact is that at the time of signing the contract, say, for a consumer loan, its full value cannot exceed the average market value calculated by the Bank of Russia by more than a third.
- There are much more reasons to trust a particular MFI if it is a member of one of the self-regulatory organizations (membership information is usually located on the company's official website).
- Each MFI should provide its clients with time to make a decision (5 days).
In addition to the question "microfinance organizations - what is it?", It is useful to understand the essence of a microloan. In fact, this is a loan the size of which does not exceed 1 million rubles. To receive such an amount on a loan can legal entities, individual entrepreneurs and individuals.
Types of microloans
All loans issued by MFIs can be divided into several types. You should start with a consumer microloan. It is designed for individuals who need a certain amount to cover their personal needs. Most loans of this type are issued for a period of up to 6 months, although in some cases installments are also possible for 2 years.
Microloans aimed at entrepreneurs have a limit of up to 1 million rubles and are allocated for purposes related to opening, supporting and developing their own business. The loan term in this case ranges from 1 to 3 years. A pledge is almost never provided, but it is necessary to collect a complete list of documents requested by MFIs.
There are also microloans designed for a very short time, and they are issued to individuals. With the help of such loans, issues related to unforeseen expenses or, for example, delayed salaries are resolved . Such loans are issued very quickly, but at the same time they have the highest interest rate.
MFIs in Russia
Now in the CIS, microcredit has become more than popular. This is due to facts such as an increase in the severity of the conditions on which banks agree to give loans, and a significant increase in the shadow sector of the economy. Many borrowers do not consider cooperation with banks relevant and turn to the possibility of microcrediting.
If you pay attention to microfinance organizations in Russia and the beginning of their activities, it is worth noting that the MFI institution was created in 2010. It was this law that allowed borrowers and credit organizations to carry out their activities legally.
The functions of supervision of MFIs are currently carried out by the Central Bank, applying to them only 2 key standards: indicators of liquidity and adequacy of own funds.
Nuances to know about
In order to protect small businesses and the public from dishonest schemes, a law was passed that somewhat limited microfinance organizations in their activities: maternity capital can no longer be a means of repaying a loan.
Consumer cooperatives also received time limits. They can work with maternity capital only if they have been operating for 3 years. Such measures have one simple goal - to minimize the percentage of fraudulent schemes. Many microfinance organizations illegally withdraw maternal capital (951 cases). Such illegal practices should not have a place in the financial services market.
Those who predicted that microfinance organizations will close until they have to come to terms with the opposite fact - such companies will continue their activities.
What else can MFIs offer?
It is important to understand that the activities of microfinance organizations are not limited to the provision of loans. Quite often, MFIs present to ordinary people and entrepreneurs the opportunity to invest their own funds at certain percentages. But at the same time, this type of investment will not be considered a contribution. The peculiarity of such investments is that they are not insured by the state. That is, customers do not have legal guarantees that their investments will be saved.
As an answer to questions about whether microfinance organizations are relevant today, what it is and how safe it is to use their services, the following idea can be noted: such companies, being legal, are able to provide fairly convenient credit conditions. Given this advantage, do not forget about checking documents and possible fraud associated with maternity capital.