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vakilkarosblog · 4 months

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What are the basic features of microfinance

Introduction:

Microfinance plays a crucial role in providing financial services to individuals who are typically excluded from traditional banking systems. It aims to empower entrepreneurs, especially those in low-income communities, by offering them access to credit, savings, and other financial instruments. This article will delve into the basic features of microfinance and shed light on the process of Section 8 Microfinance Company Registration and What are the basic features of microfinance .

Basic Features of Microfinance:

Financial Inclusion: Microfinance focuses on reaching out to individuals who lack access to formal banking channels. This includes marginalized communities, small business owners, and individuals with low income.

Small Loan Amounts: One distinctive feature of microfinance is the provision of small loan amounts. These loans are designed to meet the modest financial needs of borrowers, enabling them to start or expand small businesses.

Collateral-Free Loans: Traditional banking often requires collateral for loan approval. Microfinance, however, typically offers collateral-free loans, making it more accessible to individuals who lack significant assets.

Group Lending: Microfinance often employs a group lending model where individuals form small groups. Each member is jointly responsible for the repayment of loans, creating a support system and fostering a sense of community responsibility.

Interest Rates: Microfinance institutions set interest rates that are reasonable and sustainable for both the institution and the borrower. The goal is to ensure affordability for the borrowers while covering operational costs.

Savings and Insurance: Microfinance institutions not only provide credit but also encourage savings. Additionally, some institutions offer micro-insurance products to protect clients against unforeseen events.

Section 8 Microfinance Company Registration:

Legal Structure: Section 8 of the Companies Act in many jurisdictions allows for the formation of non-profit organizations with the primary objective of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other charitable objective.

Microfinance Focus: Companies registered under Section 8 with a focus on microfinance adhere to the legal framework while aligning their activities with the mission of promoting financial inclusion and economic empowerment.

Regulatory Compliance: Section 8 Microfinance Company Registration involves adhering to regulatory requirements set by the relevant authorities. This ensures that the microfinance institution operates within the legal framework and maintains transparency in its financial dealings.

Social Impact Reporting: Section 8 companies engaged in microfinance often emphasize social impact reporting, highlighting their contributions to poverty alleviation, entrepreneurship development, and community upliftment.

Conclusion:

Understanding the basic features of microfinance, coupled with the regulatory aspects of Section 8 Microfinance Company Registration, is essential for those aiming to establish or engage with microfinance institutions. By promoting financial inclusion and adopting a socially responsible approach, microfinance plays a pivotal role in fostering economic development and empowerment at the grassroots level.

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nnamdiabana · 2 years

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PARALLEX BANK MAKES HISTORY, BECOMES FIRST MICROFINANCE BANK TO GO FULLY COMMERCIAL For every Nigerian who is tired of illegal bank charges, annoying account maintenance fees and unresponsive customer service, a new year gift has arrived. Parallex Bank is open for business with a juicy offer of limitless transactions to Nigerians. The bank is the first financial institution in Nigeria to successfully transition from a microfinance bank to a commercial bank. “We are not going to do banking as usual, we are going the extra mile for our customers,” Parallex Bank managing director Olufemi Bakre told an excited audience of stakeholders and media practitioners at the official launching in Lagos on Friday. “From any angle within our mobile app, you can make five transactions in a day and 150 in a month without transaction charges. “Parallex Bank will pay up to five per cent on current account balances not lower that N100,000. It is not about taking advantage of a client under the canopy of making money. It is a mutually beneficial relationship. “Account maintenance charges are common in the industry. We are saying at Parallex Bank from day one, you won’t encounter any. “It shall never be in our dictionary to say ‘it cannot be done’. Our watchword is ‘how can it be done?'” Bakre emphasised that Parallex Bank is focused on delivering positively limitless experiences to its customers who shall be treated like business partners. #ParallexBank’s headquarters is located at Plot 1261 Adeola Hopewell, Victoria Island, Lagos, the serene commercial hub where the official launching and logo unveiling took place. The bank is also fully digital and customers can generate their own bank accounts via the bank’s mobile app. “It’s a new dawn,” Bakre said. #nnamdiabanasblog (at Nigeria) https://www.instagram.com/p/CYv0HR4t9-8/?utm_medium=tumblr

#parallexbank #nnamdiabanasblog

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