Microcredit: operation, amounts, conditions
Microcredit is a financial transaction generally intended for people excluded from the traditional banking system. It allows the applicant to improve his situation by obtaining goods or services. In this article, we will tell you all about microcredit, what its conditions are and how to get it according to your personal situation.
What is a microcredit?
Personal microcredit is a loan to the attention of people excluded from the traditional banking system.
The first microcredit institution, Best Bank, was founded by Muhammad Yunus in 1976.
If you can benefit from it in any situation, the borrowers concerned are often:
- Social minimum recipients;
- The unemployed;
- Low-income people.
Indeed, microcredit is open to everyone because it does not require any special income conditions.
However, you need to have a personal plan to:
- Social integration;
- And / or professional integration.
Personal microcredit is often used for the purchase or repair of a vehicle necessary for the exercise of a professional activity. It is most often linked to a life improvement or a professional project.
What are the conditions linked to microcredit?
The microcredit allows you to borrow small sums adapted to your income.
These amounts must be between $ 300 and $ 5,000.
The duration of the loan is quite long and is between 6 months and 4 years, sometimes longer.
If the duration of the loan can be long, the borrower can also choose to repay in advance. In this case, the borrower repays the sum lent quickly, which allows him to reduce the duration of the loan or monthly payments.
The cost of credit is set by the lender. It is between 1.5 and 4% and does not apply any administrative fees.
How to get a microcredit?
The microcredit applicant should not apply to a bank but to a social support network. The latter acts as an intermediary and aims to help the applicant to prepare their file before presenting it to an approved bank.
It could be :
- A house for employment;
- A district management;
- A communal social action center (CCAS);
- From a social association.
To find all of the existing infrastructure near you, you can contact your town hall or on the website of the France microcredit deposit box.
In case of agreement with the approved bank, the microcredit will be granted to you. In this case, the bank will inform you of the terms of your reimbursement, namely:
- The amount of the credit;
- The amount of monthly payments;
- The reimbursement rate.
If you wish to renounce your microcredit application, you have a right of withdrawal fourteen days after the date of signature of your contract.
What documents to provide for your microcredit application?
The list of documents to present to the social agency for the microcredit application is similar to that of a classic earmarked loan application, namely:
- Identity documents;
- A family book;
- Proof of address less than three months old;
- The last rent receipt;
- Proof of income for the past three months;
- The last three bank statements;
- The latest tax notice.
In addition to these documents, depending on your situation, you will be asked to provide an employment contract or a notification of opening of employment pole or RSA rights. In addition, if you are divorced or in debt, you will also need to provide the appropriate documents.
In any case, whatever your situation, you will be asked for a project quote to finance.
The case of professional microcredit
Professional microcredit is intended for founders or buyers of businesses whose activity is carried out in France.
To obtain a professional microcredit, you must meet the following four conditions:
- Your financing need must not exceed $ 10,000;
- Your business must be in the process of being created or have been in existence for less than five years;
- The person applying for the microcredit must do so only if he has not been able to obtain a bank loan;
- A person must be able to vouch for 50% of the microcredit granted.
To apply for a professional microcredit, you must contact an authorized body:
- Approved banking networks;
- Online microcredits and accompanying networks;
- Chambers of commerce and chambers of trades.
Professional microcredit is a loan remunerated by interest, often at least equal to 5%. The loan repayment generally does not exceed 36 to 48 months.
Exceptions exist, however. You will then just have to see with the lender if it is inclined to grant you a deferred repayment.
The case of CAF microcredit
The Caisse d’Allocations Sociales (CAF) can issue you many different and varied loans.
In this case, the microcredit will only be granted to households receiving benefits from this organization. CAF issues a low-interest credit because it can then withdraw reimbursements from the benefits it pays to its beneficiaries.
Your CAF can assign you, under the condition that you have at least one dependent child:
- An emergency loan;
- A social loan.
If the relief loan is not repayable, the social loan often takes the form of a consumer loan and has a low interest rate.
Your CAF can also give you help with improving the habitat. This loan is reserved for owners or first-time buyers.
Finally, CAF can also issue the following loans to you:
- Equipment loans (furniture or household appliances);
- A zero-rate loan of honor;
- Help to improve the habitat related to a child’s disability;
- Basic work loans;
- Exceptional financial aid.
You should know that not all departmental CAFs have the same policy. However, they are all based on the family quotient.
Other examples of microloans
The Red Cross is one of the social organizations from which it is possible to apply for a microcredit. It is intended for people excluded from the traditional banking system and cannot be used to settle a debt or meet a need for cash. After studying the file with a guide, the request is sent to a partner banking establishment.
Fine Bank connects entrepreneurs who need funds to make their professional project or their business creation a reality, with initiative networks such as ADIE. ADIE allows you to benefit from microcredits to help the development of professional projects, business creation or simply to finance mobility.
You can use our simulator to compare the best offers of microloans. For any need or support, contact our team of Across Lender experts directly to benefit from personal support in all your efforts.