The needs of representatives of modern society often require tangible costs and investments. Of course, not every inhabitant of the income level is high enough to cover any needs without auxiliary resources. It is in this case that microfinance organizations become relevant. Such companies make it possible for simple and fast lending.
What is meant by microfinance organizations
There are many different structures whose purpose is to implement various financial transactions. The issuance of loans or loans is one of the most common activities of such companies. Answering the question "what are microfinance organizations?", It is worth noting the following fact: the activity of such structures is in fact completely analogous to banking. The difference lies in the system of regulation, 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 for both entrepreneurs opening their own businesses and 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 it is much easier to get money in microfinance organizations. 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 confidence in them. Therefore, those who ask themselves questions about whether microfinance institutions are reliable, what it is and whether to use these services, it is possible to turn to such structures with certainty, since they are completely legal.
More details about reliability
One of the best ways to determine whether it is worthwhile to trust a particular company dealing with microloans is to turn to the rating of organizations of this profile. You can do this by using the services of a rating agency, for example, "Expert RA". Such information will help you to find out which companies are faithfully meeting their current financial obligations.
The value of this assessment lies in the fact that it is independent, and therefore objective, and, as a consequence, reflects the real situation. In this regard, we should not neglect the individual rating of companies operating in the format of microloans.
What is it worth to know the townsfolk
First of all, every company that falls into the category of microfinance organizations should be listed in the State Register. To find out whether the registration was valid, it is worthwhile to visit the official website of the Bank of Russia, where these data are freely available. Moreover, it would not hurt to pay a visit to the office of a specific MFI. It is there that a certificate of registration in the State Register should be placed.
Important information on existing responsibilities
In fact, any state-owned microfinance institutions and private companies have certain obligations to clients:
- Each MFI should, when issuing loans, use one tabular form of the contract, without changes.
- Any company has an obligation to voice its clients the full cost of the loan. This means that every philistine has the right to know what percentage he will have to pay over the full term of the loan. Such information is very useful when choosing a specific proposal. Another important fact is that at the time of signing the contract, say, on a consumer loan, its full value can not exceed the average market value calculated by the Bank of Russia by more than a third.
- The reasons for trusting a particular MFI are significantly greater if it is in one of the self-regulating organizations (information on membership, as a rule, is on the company's official website).
- Each MFI should provide its clients with time for decision-making (5 days).
In addition to the question "microfinance organizations - what is this?", It is useful to understand the essence of the microloan. In fact, this is a loan, the amount of which does not exceed 1 million rubles. Such a sum can be obtained on the terms of a loan by legal entities, individual entrepreneurs and individuals.
Types of microloans
All loans issued by MFIs can be divided into several types. It starts 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.
Micro-loans, targeted at entrepreneurs, have a limit of up to 1 million rubles and are allocated for purposes related to the opening, support and development of their own business. The loan period in this case ranges from 1 to 3 years. The pledge is almost never provided, but it is necessary to collect a complete list of documents that the MFI is requesting.
There are also microloans, designed for very short periods, and they are issued to individuals. With the help of such loans, issues related to unforeseen costs or, for example, wage arrears are addressed . Such loans are made very quickly, but they have the highest interest rate.
MFIs in Russia
Now in the CIS, microcrediting has become more than popular. This is due to such facts as the increase in the severity of the conditions on which banks agree to give loans, and the significant growth of the informal sector of the economy. Many borrowers do not consider cooperation with banks as relevant and appeal to the possibility of microcrediting.
If you pay attention to the microfinance organizations of Russia and the beginning of their activities, it is worth noting that the MFI Institute was established in 2010. It is this law that allowed borrowers and credit institutions to carry out their activities legally.
The functions of MFI supervision are currently implemented by the Central Bank, applying only two key standards to them: liquidity and adequacy of own funds.
Nuances you should know about
In order to protect small businesses and the public from dishonest schemes, a law was adopted that somewhat restricts the activities of microfinance institutions: maternity capital can no longer be a means of repaying a loan.
Consumer cooperatives also received temporary restrictions. They can work with the parent capital only if they carry out their activities for 3 years. Such measures pursue one simple goal: to minimize the percentage of fraudulent schemes. Many microfinance organizations maternally derived illegally (951 cases). Such unlawful practices should not take place in the financial services market.
Those who predicted that microfinance organizations will close, while they have to reconcile with the opposite fact - such companies will continue their activities.
What else can the MFI 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 residents and entrepreneurs the opportunity to invest their own funds at certain percentages. But this type of investment is considered a contribution to be incorrect. 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 the questions as to whether the 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 rather convenient credit conditions. Given this advantage, do not forget about the verification of documents and possible fraud related to parent capital.