This type of loan was initially intended for entrepreneurial start-ups who wanted to start their own business or expand it, but didn’t have enough capital to do so. Microcredit can be used for a variety of purposes, from the procurement of equipment, to the development of products and services, patent or founding capital.
The aim of this idea was to encourage self-employment, start-ups, modernize equipment and increase jobs. For these reasons, loans to companies were given for a period of five years, starting with a year. Most of these loans were financed from European funds.
Microcredits are smaller loans as the name implies
As microcredit hit fertile ground in the business world, it soon expanded into the world of individuals. They are ideal for anyone who finds themselves in an unpredictable situation, and they urgently need the money to cover the cost of repairing a car, minor household breakdowns, or going to a doctor.
Microcredit means small sums of money, usually from a few hundred kunas to several thousand kunas, depending on the creditworthiness of the seeker. The repayment period for smaller amounts ranges from a few days to a few weeks, but can extend up to three years.
Credit card microcredit
Cash microcredit per card is a kuna loan that is paid into a free of charge account and is intended exclusively for credit card users. The loan is paid into a checking account and repaid in monthly annuities, along with other credit card expenses.
It is most often approved without collateral and without credit card fees. Credit is not checked, but care is taken to ensure that the client’s payment is correct. Most often, they are paid from USD 1,000 to USD 25,000, and the repayment period varies from two months to two years. The payout averages the next day. Micro credit can easily be calculated through a credit calculator.
No additional microcredit documentation is required
The biggest advantage of microcredit is that it can be applied online. Just fill out the online application form and present your ID and current account card. Banks and other financial institutions do not require much paperwork for a small sum of money to be paid out within a day. The approved loan amount is paid directly into the loan beneficiary’s transaction account.
A current account should be opened to show that the client has regular earnings in the form of salary or pension. The account must not be blocked or secured, or it should be evident that the client is properly paying its debts.
The banker who designed the microcredit received the Nobel Peace Prize
Banker Muhammad Yunus conceived the concept of micro-credit and in 2006 won him the Nobel Peace Prize. He founded the Grameen Bank, which grants so-called microcredit an average of just $ 180 to help the poorest solve their existential problems. The awarding jury found that this type of credit offers a way out of poverty.
Yunus borrowed the first $ 27 loan from his own pocket. He lent it to people in the small village of Jombra who lived by borrowing money from a real estate agent at an interest rate of 10 percent per week. There he saw an opportunity to lift people out of poverty.