The last article I posted in this blog about what is different between Micro-financebank loan and bank loan. Now, I would like to go and enlighten more about the title above in this blog. By this, I went to local newspapers and others in my country, to read until I found what the comparison between Micro-finance bank loan and bank loan is.
In my analysis, I find that the micro-finance bank loan a person borrows for business or other investments is still better than that bank loan because any person who wants to borrow from bank for business or investments have many disadvantages based by the bank officer:
Number 1:They must choose to buy shares of blue-chip equities like Zenith Bank, UBA, etc what bank officers want them to. No matter what bank officers give you hot equities to buy shares with a loan, they are not responsible if the stock exchange suddenly crashed or any equity’s share price suddenly goes down.
Number 2: They must add 50% or 100% as a contribution on loan. But bank officers refuse to tell you what percentage you should add as contribution. For example, when you want to borrow N1million from one bank, they credit only N500, 000 into your current bank, hoping you to add 50% to that loan, to make N1million.
Number3:Your collateral security should be more than those millions of naira you borrow and also other special materials like duplex, expensive cars, etc.
Number4:bank officers do not accept that you borrow N50, 000, N100, 000 and even 200,000 because they do not want small profit based on commission. They require that you should borrow so high money from N1million to N10 million or above so that they can profit good commission. How? For example, when you are charged 50% as an interest for loan on N1million, you will give them N1.5 million in return after the mature time.
Number 5:They will give you limit time like 5, 6 months or 1 year, depending on their wish. It means they will instruct you to pay them back plus their commission within 3, 5, 6 months or 1 year, depending on their willingness.
Number 6:They charge you a very high interest for loan like 15%, 25% or up to 50%. Sometimes, they hide an interest in order to surprise you.
Number7:If you fail to pay back on time, your assets will be taken away for sale immediately. There is no excuse no matter what the reason.
Number 8:For economy volatility, the rates of banks’ interest you are charged for loan have been changed every now and then in order to eat your profit away.
Number 9:The bank requirements are usually too overwhelming.
But for Micro-finance bank loan, a person who signs up with the Micro-finance bank company will have many advantages from this company. The following advantages are here as:
Number 1:The micro-finance bank officers will allow you to access less loan for business or small-scale business like N50, 000, N100, 000, and even N1million once you open a saving micro-finance account with this company and still save any amount till six (6) months as I shared early about this in the preview article.
Number2:They just charge you the smallest interest for loan like 1%, 2% or up to 5 %.
Number3:They allow you monthly instalment daily till you complete it. They do not limit you a tenor.
Number4:They encourage you to continue loan for your business as long as you want because they want you to succeed in your business.
Number 5:They allow any person who has small trade, small-scale business borrow from them if they register with them as a member, but they do not allow any person who is just a business starter or want to start a business to borrow from them for business.
Number 6:Before they allow you to access loan for business, their requirements are to visit and see how far your business is, how far dense population you do business transaction with them is and how far your stock business recordings are first. And also they require your guarantor as well as his location first.
Number 7:They do not require your collateral security. But if you fail to do monthly instalment regularly, they will give you punishment. Or they stop doing transactions with you again.
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