The principle of micro-credit
Microcredit is a device that allows people with low resources to finance the purchase of goods necessary for the start of an activity, training or the purchase of a household essential to the family.
For a long time, the micro-credit was intended to help unemployed people or beneficiaries of social minima to launch an independent activity allowing them to find a satisfactory material situation. But this device was not enough and that is the reason why the public authorities decided to set up the micro-credit social. Otherwise, up to 600 € and from 200 €, there is the very fast and flexible micro credit at Finfrog to repay a quarter, for urgent repairs.
This is a special category of micro-credit which is also called personal micro-credit. Its purpose is to facilitate the integration of people with low incomes who must make the necessary expenses to find a salaried job or to meet the needs of their family. It can therefore be used for the following expenses:
- the financing of the purchase or the repair of a vehicle if the applicant imperatively needs this vehicle to occupy a job;
- funding for the replacement of an appliance that can no longer function properly, such as a refrigerator, washing machine or stove;
- the financing of professional training or fees that the applicant must pay if he is a student;
- financing the purchase of a computer, particularly for someone who needs this device to work at home;
- the financing of medical care poorly reimbursed by Social Security, but essential such as a dental prosthesis or a pair of glasses.
On the other hand, the social micro-credit can not be used for the settlement of a family’s current expenses or to pay overdue debts such as a delay of rent.
People who can benefit from this type of micro-credit
Social micro-credit is mainly intended for individuals who can not benefit from conventional bank loans, particularly because of the weakness or lack of stability of their income or the fact that they are entered in the credit incident file. individuals of the Banque de France. It can therefore be requested by unemployed people, or people benefiting from the active solidarity income or the specific solidarity allowance.
Amounts, duration and cost of social micro-credits
The body responsible for examining the micro-credit application calculates the amount taking into account the needs of the applicant and the amount of his income. The amount lent varies between € 300 and € 5,000 and the duration of the credit can reach five years. Regarding the applied rate, it varies most often between 1.5 and 4%.
As a result, social microcredit can be an appropriate response in many cases.
The steps to be taken to obtain a social micro-credit
Anyone who is in a difficult situation has an interest in considering a request for social micro-credit. In particular, it must avoid asking for a revolving credit that would be much too expensive for it and that would significantly aggravate its difficulties. Many households found themselves in situations of over-indebtedness because of excessive use of revolving loans.
Do not go directly to a bank, but it is necessary to contact an association of aid to people in difficulty or an organization specializing in the management of social aid. People under the age of 25 can contact a local mission. Other people can contact the following organizations:
- the local community center of social action of their locality or the management of their district;
- their family allowance fund;
- an organization of solidarity such as Catholic Relief, the Red Cross, Croesus;
- a home for young workers.
After obtaining an appointment, the applicant will meet with a counselor at the premises of the contacted organization. This advisor will take stock of his situation with him in order to prepare the implementation of the solution that will seem the most appropriate. On the other hand, it will give the applicant valuable information for his reintegration and for the improvement of the material situation of his family.
Then, the file will be transmitted to a banking organization that will grant social micro-credit if it seems possible. The bank will be particularly sensitive to the steps the applicant will take to find a job allowing him to receive sufficient income to repay his loan. As a result, the step of studying the applicant’s situation and seeking solutions to achieve that goal is very important.
Once the social micro-credit has been released, the applicant will have to repay it in accordance with the amortization schedule provided by the bank.