Reasons for the popularity of microfinance companies:
1, the application threshold is low. Compared with picky banks, it is much more approachable. Some borrowers with low income or salary in the form of cash payment (which can provide self-help for 3-6 months) can apply for loans directly through small loan companies.
2. The lending speed is fast. The bank's audit process is strict and complicated, while the lending institution is the opposite, and its high efficiency undoubtedly improves the lending speed. So friends who are in urgent need of money can consider applying for loans from such institutions.
3. Lending information will not be included in the credit information system. Although the credit information system is becoming more and more mature, it still needs to be improved. The reason is that all credit transactions between borrowers and lending institutions other than banks will not be recorded in the credit information system, and naturally they will not be reflected in the credit information report. This means that the borrower's debt and overdue behavior not only enjoy full "privacy", but also help the borrower to borrow from other institutions again.
Microfinance companies also have some shortcomings:
1. Small loan companies have high loan costs. Because the application threshold of small loan companies is low, the credit risk they bear is naturally large. In the loan industry where risks are turned into profits, the interest charged will naturally be higher than that of banks. However, the fees charged by microfinance companies are different. For borrowers, money is king.
2. There are many loan scams. The microfinance market is full of criminals, who wear the cloak of microfinance, but do the activities of swindlers. Generally speaking, 80% of lending institutions that require borrowers to pay fees, service fees and other fees in advance are liars. Formal microfinance companies will directly deduct money from loans or charge various fees when borrowers repay.
The above is about why microfinance companies are so popular? What are the advantages and disadvantages of microfinance companies? " Welcome to pay more attention to the online loan channel in Tian Yan, and more exciting content is waiting for you.