The popularity of micro finance institutions has grown over the years, experts expect it to grow even more in the years to come. Unlike banks they have favorable lending times, better interest rates and the waiting period before your loan is approved is shorter. Some micro credit has have online loans which any member can access if you have internet connection, you required to fill some forms online, the after they verify your documents, the money is sent to you.
Due to the high demand of loans there are many micro credits which have opened branches throughout, this is a challenge to a borrower as they try to differentiate them and choose one among them. Below are factors to consider when looking for a micro finance institution.
First, it is important to make sure the micro finance is registered and regulated by the relevant body in your state. Although they may be based online, ensure they have a physical office, the licensing they have should also be current.
What terms does the micro credit use to lend their loans to borrowers? The rates for one micro credit may be higher as compared to that of another micro credit. To avoid paying a high interest when there is company that would have given you the same loan at a lower rate, do rates comparison among different micro credit. Also, check if the institution provides their clients with a grace period in case they are unable to pay their loan on time. Go for a micro credit that has terms that you are comfortable with.
What are the kinds of loans that a micro credit is offering? Different institutions specialize in different kind of loans, there are those who do short-term loans, while other they mainly focus on long-term loans. In some cases, an institution only focuses on personal loans and others business loans, find out the niche the company focuses on, then choose a micro credit that offers the kind of loan you require.
What kind of reputation does the micro finance institution have? Carry out a background check on the micro credit, on the different reviews that have been on different online platforms. Check if they are any complains about the institution charging people over priced interest rate and poor services. Micro credit with good customer relations will always get reviews.
What are the number of years the micro credit has been running? A micro finance that has been providing their services for a while, have known all the challenges in the field and found their solutions.