While traditional banking institutions undeniably offer valuable services to society, the choice of where to seek financial assistance prompts consideration. Microfinance institutions (MFIs) hold a distinct advantage in this regard, easily justifiable.
Traditional banks typically extend microcredit solely to financially stable clients, demanding an extensive array of documentation to establish reliability. In contrast, MFIs require only a passport and PESEL, enabling individuals to obtain the needed amount without the necessity of guarantors or collateral. Furthermore, funds provided by MFIs lack specific usage restrictions, allowing borrowers the flexibility to allocate them to various needs.
Additional merits of engaging with MFIs include:
- Minimal Documentation Requirements
- Swift Processing – funds can be credited to a card within 10-20 minutes
- Remote Access – MFIs facilitate online microloan disbursement to a card or bank account, eliminating the need for physical visits to financial institutions
- 24/7 Support – Microcredit is accessible to citizens of the Philippines without rejection, offering crucial assistance at any time, especially in urgent situations
- Inclusivity – Even individuals with a poor credit history can secure microcredit, potentially improving their credit standing through timely repayment
- Extension Options – MFI borrowers can leverage the prolongation service, mitigating the accrual of penalty interest for late repayments
However, it is important to note that microcredit institutions often impose higher interest rates. Some MFIs, however, extend favorable interest rate offers to both new and returning customers.
Microcredit is accessible to residents in both metropolitan areas and agglomerations. Citizens aged 21 to approximately 69 years (depending on the specific MFI’s conditions) can avail themselves of a microloan on their bank card. For those residing in cities with MFI branches, cash microloans are also an option. Determining the presence of a chosen credit institution’s office in your city can be done online or by contacting MFI managers directly.