Banks, as the main unit of the financial sector of the world economy, insured themselves, primarily by the NBCH creation. Thus, while having a delay in loan repayments, a person is limited in loans obtaining in banking structures.
In this case, microfinance organizations can’t wait to help the citizen, as they have fewer requirements to the borrower’s credit histories and the financial situation, which makes it possible to get a loan even with a bad credit history, but at a higher interest rate.
The financial sector of microfinance in the Philippines is divided into two constituent realities: cooperatives with legal status and informal organizations serving the microfinance market. The purpose of such organizations is to service the low-income sector, including micro-enterprises.
The advantage of such organizations is that their loan approving decision is made quickly and the loan is issued instantly.
Financial Organizations in the Philippines
Metropolitan Bank and Trust Company
The largest Philippine bank, established in 1962. It issues both large loans for the purchase of real estate, and microloans of small sizes for a period of up to 12 months.
The example of a loan for a period of 12 months:
10,000 pesos (approximately $ 195).
The loan interest is very low and it is only 4.8% per annum. The required package of documents is minimal, the approval is fast. The company also operates outside the Philippines, and attracts investors as well. The software is quite user-friendly and allows you to track transfers online.
The largest microfinance organization operating in the Philippines. Its main direction is to serve the poorer sections of the population. The main goal of the company is to fight poverty. There are three types of microloan:
- Ti Kredi (“Small loan”). The loan program consists of three months, the loan amount is up to $ 150.
- Solidarity. The loan program is calculated from $ 45 up to $ 850.
- Business development. Loans are issued for a period of 12 months and starts from $ 1,300.
Lending conditions are very affordable, and the interest rate must be specified during the loan period.
It operates in the Philippines at the moment. The main advantage of the organization is a one-minute decision and a high level of approval. The program works using an automated process. The interest rate of the loan is rather low and doesn’t exceed 13% per annum. Loans are issued for a period of up to 12 months. There are 7 types of lending: 1) express loan; 2) consumer loan; 3) loan to Qiwi wallet; 4) microloan; 5) credit card; 6) mortgage; 7) car loan.
It issues loans in the Philippines. The first loan is issued for a period of up to 15 days. The interest rate is quite high: for example, if a borrower gets 10,000 pesos, he/she will have to repay 13,750 pesos. The loan issued by the company is automatic and it is issued within a few minutes by transferring the loan to a bank card without additional fees. A high percentage of approval, which is up to 95% of the number of applications.
One of the dynamically developing company in the Philippines. The company managed to avoid obtaining a banking license, related to the receipt of deposits, and to get a position in the market of electronic money transfers that are built on the principle of an agent. The Philippine Central Bank has still imposed a restriction on the use of the “G-Cash” system. Thus, the balance on electronic accounts can’t be more than 10,000 pesos (this is about $ 195), the service is limited to transfers, that is, no more than 40,000 pesos per day and not more than 100,000 pesos per month (that’s about $ 780 and $ 1950 ). The service is very convenient for the repayment of loans obtained from outside organizations.
How to increase the chance of a loan approval?
And how to make sure that the loan is approved at a lower interest rate? The first and the most correct decision is to apply simultaneously to several microfinance organizations. An obligatory condition according to the laws of the Philippine Islands, is that the borrower must be at least 21 years old, and there must be no bad credit history in the Philippines.
Do not forget that microfinance organizations are more loyal to borrowers than banks, and even with bad credit history there is always a chance to get a loan, but at a higher interest rate than desired.