Microfinance Banks (MFBs) are licensed by the Central Bank of Nigeria to provide loans, accept deposits, and conduct fund transfers and other financial services to unbanked working individuals or families, entrepreneurs, and small businesses that lack access to traditional sources of such financial services.
More than 20 million borrowers and 15 million savers were served by the microfinance market…
The majority of microfinance banks in Nigeria offer higher interest rates than traditional banks. The objective of microfinance was to alleviate poverty.
Microfinance loans have an interest rate of between 5% and 8%, depending on the loan size.
The majority of loans are for 1-3 months, 4-6 months, or 4-12 months, depending on the circumstances, and repayments are made monthly, except for group loans, which are repaid weekly.
You can earn as little as N50,000.00 or as much as N10,000,000.00, depending on the outcome of the evaluation.
After you submit your documents, the loan application process takes 3–5 business days.
What Are Microfinance Institutions?
Microfinance banks are financial institutions that lend small amounts of money to individuals, groups, entrepreneurs, and organizations, as well as provide access to credit for their businesses. Loans are made with the intention of being repaid in small installments with a low interest rate.
The majority of microfinance institutions provide loans for business purposes, asset acquisition, agriculture, educational purposes, and loans to salaried individuals. No microfinance institution will make you a loan without a money-back guarantee.
While some microfinance loans carry interest rates significantly higher than those charged by traditional financial institutions, they provide critical funding to assist low-income or otherwise disadvantaged earners in improving their economic circumstances.
What are the criteria for obtaining a Microfinance bank loan?
To obtain a loan from a microfinance institution in Nigeria You must have been in business for at least one year and at your current location for at least six months.
2. Two passport photographs must be submitted.
3. Identification Document (Driver’s license, Permanent Voters Card, or International Passport) BVN
4. A minimum of six months’ utility bill
5. A Surety (a business person or salary earner).
6. Collateral for loans to small and medium-sized businesses.
7. Statements of account and checks for loans in excess of $400,000.
9.Affirmation of the business’s location
The majority of microfinance institutions do not require collateral for loans; rather, they require guarantors. Guarantors must be financially stable, either as business owners or salaried employees, with at least 35% of their earnings covering monthly repayment. If the customer is unable to repay the loan, the Guarantor will be required to repay the loan amount. The prospective customer and the guarantors must sign the loan agreement on the day it is signed.
Documents required for Guarantorship
You must provide the following documents in order to become a Guarantor with any microfinance bank in Nigeria.
1. During the loan application process, the guarantor must submit two recent passport photographs.
2. You must submit a copy of your most recent utility bill.
3. A valid form of identification (national identification card, passport, or driver’s license)
How is a Delinquency Fee calculated?
This is the fee levied against the customer in the event of a default. It is worth 2% of the loan’s outstanding balance.
How do I repay a bank loan from Microfinance?
1.You may utilize your Debit Card (Brighta Cash).
2. You can make transfers to your MfB account from correspondent (other) banks.
3. You can transfer funds to your MfB Account using Quickteller on ATM machines or your mobile phone.
4.Alternatively, you may visit any of our Agent Banking officers to make a POS deposit into your MfB account.
Open an MfB account of your choice.
When you visit a microfinance bank to apply for a loan, the first thing you will be asked to do is open an account with the bank in order to access the loan. This demonstrates your seriousness and your willingness to commit to the bank.