The financial literacy of our population has a frankly low level, which is confirmed by numerous studies. Microloans taken from MFIs often lead to very sad results because of this. But if you look at it in more detail, most negative judgments are nothing more than a delusion.
Top misconceptions about microcredit
Misconception #1. Knocking out debts with blackmail and threats.
Yes, periodically such situations appear on the first lines of newspaper pages, but all licensed MFIs cooperate with debtors under the same scheme with well-known banks. When it is not possible to achieve the result with your own hands, the cases are transferred to legitimate debt recovery agencies. Once again, legal, which does not allow the notorious collectors to use blackmail and threats as effective tools. This is the first and main item from the entire list of misconceptions that frightens possible borrowers.
Misconception #2. The terms of the microloans agreement are always unenforceable.
Everyone knows that microloans have to be given with a colossal % rate, which can be many times higher than the loan issued. However, this situation develops only for a long period (it is in terms of annual %, microloans in comparison with loans become unprofitable), and the appointment of microloans is quick money with a quick return.
Misconception #3. Microcredits are issued to everyone.
Due to the simple requirements for the conclusion of the contract, it is a common misconception that this opportunity can be used by everyone. Without taking into account individual proposals, analysts of the company carry out serious work to check customers for legal capacity.
Misconception #4. Money problems are the only reason for taking a microloin.
Due to a superficial understanding of the work of MFIs, this item is included in our list of misconceptions. Taking an insignificant amount for a short period of time makes it possible to correct your lending history and stock up on a more positive reputation. Also, this method is very popular in the case of a payday loan.
Misconception #5. The activities of MFIs are not regulated.
This is partly true, since the legality of the transaction is determined by the client himself. The state regulates the activities of all companies that follow the white path. And frightening stories from newspapers are an echo of cooperation with firms that want to profit without the appropriate permits. You can check the organization for honesty by its presence in the register of the Central Bank.
Misconception #6. Personal data is transferred to outsiders.
The privacy policy has always remained relevant,and cooperation with legitimate MFIs also implies this. The rules always contain information with instructions on excluding or restricting the transfer of personal data from the lists. When using the site, it is worth making sure that the data is encrypted, that is, using a secure (https) protocol.
Misconception #7. You can't compromise with MFIs.
Turning to the services of collectors is the last option for debt repayment by MFIs. Initially, they try to resolve all disputes peacefully in order to repay part of the debt, and often make concessions. If there are no funds to repay the debt, there is always a chance to get refinancing or deferral.
