What Are the Different Types of Microfinance Jobs?

Microfinance is characterized by taking low-income people as its main service object, implementing a small-term short-term loan and instalment repayment system, and using a market economy as the basic operating environment. It requires that loan interest rates and other fees can at least offset the capital cost and management fees of the institution. Expenditure has systematically eliminated various disadvantages of discount loans. In terms of design, it has the advantages of both the informal credit method and the formal credit method. The selection, disbursement, and recovery of loan projects are carried out in an open state, and necessary contacts are established with formal financial institutions.

Microfinance Features

Right!

Microfinance is characterized by taking low-income people as its main service object, implementing a small-term short-term loan and instalment repayment system, and using a market economy as the basic operating environment. It requires that loan interest rates and other fees can at least offset the capital cost and management fees of the institution. Expenditure has systematically eliminated various disadvantages of discount loans. In terms of design, it has the advantages of both the informal credit method and the formal credit method. The selection, disbursement, and recovery of loan projects are carried out in an open state, and necessary contacts are established with formal financial institutions.

Chinese name

Microfinance Features

Service object

Low-income people

System

Short-term loans and installments

Compared with the small pledge loan business started in the past, the biggest difference of small loans is that they do not need to provide any collateral and collateral, which greatly reduces the loan threshold and expands the audience.

Microfinance features:

1. For low-income people as the main service object, implement a small-term short-term loan and installment repayment system, and take the market economy as the basic operating environment. It is required that the loan interest rate and other fees can at least offset the capital cost and management fee of the institution. Various disadvantages of discounted loans have been eliminated in the system.

2. The design of microfinance has the advantages of both informal and formal credit methods, such as strengthening the user's trust through the close relationship with the user at home, determining convenient transaction time and place, and participatory monitoring. , Reducing transaction costs and management costs; on the other hand, it has the formality and strictness of formal financial institution management, which refers to the provision of credit to low-income people through precise organization and strict management without the need for guarantee Services while reducing the high risks of informal credit.

3. The selection, disbursement, and recovery of loan projects are carried out in an open state. Encourage and organize low-income people to participate in the entire process of selection, management, supervision and implementation of credit projects. Attention is paid to the mobilization and organization of savings for low-income earners, and technical training and support for low-income earners is regarded as an inherent requirement to achieve their goals.

4. Establish necessary contacts with formal financial institutions.

Examination of the relevant qualifications of the borrower is a prerequisite for the signing of a loan contract and an essential procedure for borrowing. The significance of the review is to assess the size of the loan risk and to determine the success of the loan transaction.

I. Review risk The generation of loan risks often begins at the loan review stage. It can be seen that the risks arising during the loan review stage mainly occur in the following links.

(1) Omissions in the review content There were 10,000 leaks in the loan review staff of the bank, which caused credit risks. Loan review is a meticulous task, requiring investigators to conduct systematic inspections and investigations on the qualifications, qualifications, credits, and property conditions of loan subjects. In practice, some businesses

(2) No due diligence. In practice, relevant loan reviewers often only pay attention to the identification of documents, but lack due diligence. In this way, it is difficult to identify fraud in loans and cause credit risks.

(3) Judgment errors

The banks have not listened to expert opinions on the relevant content, or professional judgments have been made by professionals. In the process of loan review, it is not only necessary to find out the facts, but also to make professional judgments such as legal and financial appearances regarding the relevant facts. In practice, most

Legal content of pre-loan investigation

(1) Examining the legal status of the borrower regarding the legal establishment and continuous existence of the borrower. If it is an enterprise, it should check whether the borrower has been established in accordance with the law, whether it has the qualifications and qualifications to engage in related business, check the business license and qualification certificate, and pay attention to whether the relevant license has passed the annual inspection or relevant inspection.

(2) Regarding the borrower's creditworthiness, check whether the registered capital of the borrower is suitable for the borrowing; examine whether there is any apparent withdrawal of the registered capital; previous borrowing and repayment; and the borrower's product quality, environmental protection, tax payment, etc. There are no illegal situations that may affect repayment.

(3) Regarding the borrowing conditions of the borrower Whether the borrower has opened a basic account and a general deposit account in accordance with the relevant laws and regulations; whether the borrower (if it is a company) whose external investment exceeds 50% of its net assets; the borrower's debt ratio Whether it meets the requirements of the lender;

(4) Regarding the guarantee For the guarantee guarantee, the qualification, creditworthiness and ability to perform the contract of the guarantor shall be investigated.

3. Borrowers and their principals should also conduct a special review. To mitigate the moral hazard of the lender, the borrower and its principals should also specifically review the financial institutions' loan qualifications, in addition to examining the borrower's qualifications, conditions, and operating conditions. In addition to other circumstances, the personal quality of the investors and legal representatives and key managers of the enterprise shall be strengthened and controlled, including:

(1) Gambling, drug abuse, sexual abuse, and fostering mistresses for the main personnel such as the chairman, general manager, factory manager, and manager, often go to dance halls and saunas, organize weddings and funerals, and purchase is not commensurate with their economic strength In the case of limousines and high-end hotels, corporate loans must be strictly controlled.

(2) Loans to family-owned groups or companies must be strictly controlled. The so-called family-type group or company refers to an enterprise in which the main person in charge of the group and its subsidiaries or hate companies, the main leadership positions within the enterprise are all or mainly held by blood-related persons and their families and relatives.

(3) For corporate representatives who hold foreign passports or have foreign permanent residency, if their enterprises and companies have branches abroad, the loans of enterprises whose major family members settle abroad or set up companies abroad should be strictly controlled. Legal representatives should pay close attention to the capital exchanges of overseas companies and enterprises. In particular, the transfer of funds abroad or the unknown transfer of funds must be strictly examined, monitored and stopped in a timely manner.

(4) Before the loan, the part-time work of the legal representative of the enterprise shall be investigated. Loans to related enterprises where one person serves as the representative of multiple corporate legal persons must be strictly controlled.

(5) When reviewing a loan, it must be based on the borrower's qualifications, conditions, operating conditions, repayment ability, and quality of the main person in charge of the enterprise. It must not be based on the political identity of the borrower, such as "model workers", "advanced elements" "," Overseas Chinese "," Representatives of the National People's Congress "," members of the CPPCC ", etc., to reduce loan conditions or to issue and manage loans in accordance with rules and regulations.

(6) The borrowing and lending relationship only occurs between the parties. For those loans that have passed or made use of the relationship of leaders, relatives, friends, classmates, comrades-in-arms, etc., and write notes, the examination of loan conditions must not be relaxed. No loan will be granted to those who do not meet the loan conditions.

(7) When issuing a secured loan, the relationship between the borrower and the guarantor must be carefully investigated. For enterprises where the borrower and the guarantor belong to the same group company, the loan must be strictly examined. The guarantee provided by the branch of a non-independent legal person is invalid.

Suggestions for loan review

Every loan is carefully reviewed, and the risk assessment of the loan cannot be based on past reviews or credit. The review cannot be relaxed or the investigation procedure reduced because the borrower has repaid the principal and interest on time in the past.

Establish a regular appointment system for the borrower's legal representative and its main management personnel. The appointment period can be determined according to the size of the loan amount and the changes in the production and operation of the borrower. If the loan amount is large, the appointment period should be shortened accordingly.

Credit officers (loan officers, members of the credit review team, members of the credit review committee) and borrowers must not engage in improper private contact in lending activities.

Credit personnel and their immediate family members shall not accept the borrower's cash, valuable gifts, shopping vouchers, etc .; may not participate in entertainment activities where the borrower pays fees; and shall not reimburse the borrower for any expenses.

For loans with large amounts, long periods of time, or loans used by borrowers for specific purposes, professionals such as lawyers and accountants should be hired to make professional judgments and provide expert opinions on related matters. ^[1]