Some people, not having the necessary requirements to obtain conventional financing, have the option of requesting a microcredit.
What is a microcredit?
It is a loan that is made to a person or a group of people so that they can develop a project; for example, to set up a place where food is sold, a small grocery store or similar economic activities.
It is usually granted without having to prove income. Documents such as proof of address and official identification are regularly requested.
This type of credit has different modalities, for example if it is granted to a certain number of people, they can choose to divide the payments among themselves. Typically, microcredits are paid weekly or biweekly, so if the credit is granted to twelve people, each of them would pay once every three months. If you are interested in this type of financing, you would have to approach the bank of your choice to find out the requirements and payment methods.
What can I use it for?
As we mentioned before, you can use it to undertake individually or in a group. Likewise, there are microcredits to help businesses that already exist but need to be strengthened, for example, a grocery store that is having difficulty restocking could request it to be able to continue selling items.
There are also microcredits designed for women, which seek to empower and advance marginalized communities. Microcredits also have the possibility of becoming personal loans or for the remodeling of properties.
The benefit they can bring to society is important, since they promote the financial inclusion of groups that in some way cannot have access to certain banking services or different types of financing.
In addition, by having a microcredit they have the possibility of building a credit history that later can become the letter of introduction to obtain loans of other types, not to mention that it can help many small businesses find economic stability.
Always remember to approach financial institutions to clarify your doubts, do your research and make an informed decision.
