How to apply for social micro credit?
Do you want to take out a bank loan but you are aware that your financial situation is delicate and that this last one risks not being granted? Do not panic, here we find solutions for people prohibited from banking, unemployed or in a situation of over-indebtedness. Nothing is lost, you just have to be patient and choose the best solutions.
What is a social micro credit?
Social micro credit is intended for people excluded from the traditional banking system, because of their income considered too low or because of an unstable professional situation. People on fixed-term contracts, temporary workers or even seasonal workers are often affected by this problem.
Social micro credit is a low-rate loan guaranteed in part by the State and in part by the lending financial institution. In this respect, it is comparable to the student loan guaranteed by the State. Its amount must be between 300 US dollars and 5,000 US dollars. However, in some cases it can reach US $ 12,000. The loan will have to be repaid within five years.
Difference between social micro credit and professional micro credit
Be careful, do not confuse social micro credit whose objective is to improve the personal situation of the applicant by allowing him in particular the purchase of a computer or even household appliances or used for expenses related to the employment (purchase of a new vehicle, repair of a car etc.) with professional micro credit which aims to facilitate business creation.
Who can benefit from a social micro credit?
In 2016, it was estimated that more than 5 million people were not eligible for a loan. In all cases, to be able to benefit from a social micro credit, applicants must be excluded from the classic bank loan.
Several factors explain the fact of not being able to borrow money from a traditional banking establishment: having too low income. It is recalled that the debt ratio of a classic bank loan must not exceed the maximum 33% of the borrower's income. A professional situation considered unstable by the banks can also explain a refusal: people without professional stability such as CDI often encounter difficulties in borrowing such as job seekers, young people, temporary workers or recipients of RSA.
Persons banned from banking who have been registered in the central check file may possibly apply for a social micro credit but must first obtain the agreement of the Bank of United States.
What are the terms of the loan?
As we have already mentioned, the minimum amount of a social micro credit is 300 US dollars. In 2014, it is considered that the average amount of a social micro credit was 2,266 US dollars. The peculiarity of the social loan is that the guarantee is supported up to 50% by the State and the other half by the lender. In addition, the fixed rate is between 1% and 4% depending on the bank. Be aware that it is quite possible to repay the loan early if the borrower's financial situation changes.
How to apply for social micro credit?
It is impossible to apply for social micro credit by contacting the lending financial institution directly. Indeed, it will be necessary that the applicant first contact a social network such as for example a national or regional social association (The Red Cross, the Restos du cœur etc.), an integration association or fight against exclusion: local missions, local plans for integration and employment (PLIE), a neighborhood authority, a municipal social action center (CCAS), an employment center, or even a home for young workers. It is quite possible to carry out an internet search to locate the social referents by department who can support an applicant in his research for social microcredit.
Microcredit is a loan that engages the borrower's responsibility to repay the monthly payments. The social support worker must ensure feasibility by not putting the applicant in difficulty. The estimated debt ratio for a classic loan should not exceed 33%. This rule does not apply for microcredit and varies according to the applicant's situation.
Once the situation has been studied, the referent body draws up a file that it will submit to the partner banks (Crédit Agricole, Crédit Mutuel, Banque Postale, BNP, Crédit Coopératif and Crédit Municipal). If the request for social microcredit is accepted by one of its partner banks, the deadline for releasing the funds is between 2 weeks and 2 months. Please note that you will not choose the lending institution yourself and that it is the social support person who is responsible for calling on the partner banks.