The essence of microcrediting is to issue loans for small amounts of money and for a short period of time. Usually, people that borrow money cannot take a loan from a bank for various reasons. Microcredits are interesting for borrowers, primarily because you do not need to provide an income certificate or to have a good credit history to get short term cash loans.
Philippines legislation provides a definition for microcreding – microfinancial activity. This means that a legal entity which issues a loan for several years has status of an MFI (microfinance organization) and can issue short term money loans within the framework of Philippines legislation. Of course, microcrediting in Philippines is controlled by a number of laws.
In recent years, the system of quick short term loans is developing rapidly in Philippines. Since 2005, the microcredit market has grown by 300%. In 2011, the market volume was 7,5 billion PHP, a year later this amount nearly doubled and was 15 billion. Experts forecast that this trend will continue until 2018.
Usually, Interest rates on short time loans exceed the rates for bank loans but unlike the process of obtaining bank loans, a borrower needs 15-20 minutes to get a small sum. In addition, he will have to provide minimum of documents.
Why do people register quick short term loans? Almost half of them take a loan for 15-30 days to pay for urgent needs. In 30% of cases, loans are issued to buy different products (most often, household and computer equipment). In other cases, people register loans to pay for medical services, repairs, travel or to pay off another loan. The loan term does not exceed 8 weeks since the amounts are relatively small and the financial company faces certain risks when crediting those who cannot provide an income certificate.
Currently, there is an opportunity to get instant short term loans online without leaving your home. It is enough to submit an application form on the web-site of a credit organization and after a positive answer to choose how you want to receive the money. It can be a cash microcredit or microcredit on your card.
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