Do you want to use a bank loan but are you aware that your financial situation is delicate and that the latter may not have been granted? Do not panic, we find here solutions for people banned banking, unemployed or in a situation of overindebtedness. Nothing is lost, you just have to be patient and opt for the best solutions.
Social micro credit is intended for people excluded from the traditional banking system, because of their income deemed too low or because of an unstable professional situation. People on temporary contracts, temporary workers or seasonal workers are often concerned by this problem.
Micro-credit is a low-rate loan guaranteed in part by the State and partly by the lending financial institution. It is comparable to the student loan guaranteed by the State. Its amount must be between 300 euros and 5,000 euros. It can however, in some cases, reach 12,000 euros. The loan must be repaid in five years maximum.
Attention, do not confuse the micro social credit whose objective is to improve the personal situation of the applicant by allowing him especially the purchase of a computer or even household appliances or used for expenses related to the employment (purchase of a new vehicle, repair of a car, etc.) with the professional micro-credit which aims to facilitate the creation of a business.
In 2016, it was estimated that more than 5 million people could not qualify for a loan. In all cases, to qualify for a social micro credit, applicants must be excluded from the conventional bank loan.
Several factors explain the fact of not being able to borrow money from a traditional banking institution: to have too low incomes. It is recalled that the debt ratio of a conventional bank loan should not exceed the maximum 33% of the borrower’s income. A job situation deemed unstable by the banks may also explain a refusal: people who do not have permanent job stability like CDI often find it difficult to borrow, such as jobseekers, young people, temporary workers or beneficiaries of the RSA.
Prohibited banking persons who have been registered in the Central Register of Checks may be eligible for a social micro-credit, but must first obtain the approval of the Bank of France.
As we have already mentioned, the minimum amount of a social micro-credit is 300 euros. In 2014, the average amount of a social micro-credit was considered to be € 2,266. The special feature of the social loan is that the guarantee is covered 50% by the State and the other half by the lender. In addition, the fixed rate is between 1% and 4% depending on the banks. Be aware that it is entirely possible to repay the loan early if the borrower’s financial situation changes.
It is impossible to apply for a social micro credit directly from the lending financial institution. In fact, it will be necessary for the applicant to address beforehand a social network, such as an association with a national or regional social character (the Red Cross, the Restos du Coeur, etc.), an association of insertion or fight against exclusion: local missions, local plans for integration and employment (PLIE), a district management, a municipal center for social action (CCAS), a house of employment, or a home for young workers. It is quite possible to carry out an Internet search to locate social referents by department that can accompany an applicant in his research social micro credit.
Microcredit is a loan that commits the borrower to repay the monthly payments. The social coach must ensure feasibility by not putting the applicant in difficulty. The estimated debt ratio in a conventional loan should not exceed 33%. This rule does not apply for microcredit and varies depending on the situation of the applicant.
Once the situation has been studied, the referent agency will prepare a file for submission to the partner banks. If the request for social micro credit is accepted by one of its partner banks, the deadline to release funds is between 2 weeks and 2 months. Be careful, you will not choose the lending institution yourself and it is the social coach who takes charge of calling the partner banks.