Microfinance entails delivering financial services to individuals or groups with low incomes who are typically excluded from traditional banking. The primary focus of most microfinance institutions is to provide credit in the form of small working capital loans, commonly referred to as microloans or microcredit.
Microfinance aims to extend financial services to economically disadvantaged individuals who are traditionally overlooked by mainstream financial institutions. In Nigeria, a significant portion of the population still lacks access to financial services.
Varieties of Microfinance Institutions (MFIs) include Village Savings and Credit Associations (VISACAs), Finance Companies (FCs), and Fiduciary Financial Institutions (FFIs).
Apply for the 2 million Naira SMEDAN Loan Programme
Requirements for Applying for a Microfinance Loan:
- Business Proof: It is essential to demonstrate ownership of a business, whether small or large, to qualify for a microfinance loan, as this type of loan is not accessible to salaried workers.
- Citizenship Proof: Applicants must establish that they are documented residents of the country to be eligible for the microfinance loan.
- Residency Proof: Submission of a valid proof of residency, such as a utility bill or bank statement, is mandatory for eligibility for this loan.
How to Apply for a Microfinance Loan: Visit a nearby Microfinance institution of your choice, ensuring they offer favorable interest rates, and proceed with the application process.