What are Micro Loans? Kenya Bankers Sacco
Micro loans are a type of short-term business loans. They can give small businesses essential funds to maintain and grow their operations. This allows individuals who are living in poverty to work on becoming financially independent so they can work their way into better living conditions. These flexible, short-term loans can be a very useful alternative to larger business loans. For many small business owners, a small microloan can make a huge difference in their future success. And, because the loans are typically very small amounts, there isn’t usually the worry of being burdened by a large loan that potentially will never be able to be paid back
Microlending has been facilitated by the rise of the internet and the worldwide interconnectivity that it brings. People who wish to put their savings to use by lending and those who seek to borrow can find each other online and transact.
Benefits of Micro Loans
- Children who are living in poverty are more likely to have missed school days or to not even be enrolled in school at all. By receiving micro financing products, there is less of a threat of going without funding, and that means more opportunities for children to stay in school.
- The problem with poverty is that it is a cycle that perpetuates itself. When there is a lack of money, there is a lack of food. Microfinance changes this by making more money available. When basic needs are met, families can then invest into better wells, better sanitation, and afford the time it may take to access the health care they need.
- Microfinance is also able to let entrepreneurs in developing countries be able to create new employment opportunities for others. With more people able to work and earn an income, the rest of the local economy also benefits because there are more revenues available to move through local businesses and service providers.
- Microloans are an important component of microfinance, but so is saving money. When people have their basic needs met, the natural inclination is for them to save the leftover earnings for a future emergency. This creates the potential for more investments and ultimately even more income for those who are in the developing world.
- There is a valid argument to be made that some microloans go to cover household expenses instead of business needs. Some are using these loans to pay bills or purchase food. It’s true. Yet without this product available, there wouldn’t be an ability to pay bills or purchase food. So even though it may not always be used for business purposes, it still serves a purpose by reducing stress. .
Do you need help?
Before you begin the process of applying for any type of business financing, it’s always a good idea to first clearly evaluate where your business is at now and where you want it to go. If money is required to get it from point A to point B, the next step is to consider how much you need and your options for getting these funds.
At Kenya Bankers Sacco, we were registered on 14th February 1975 as a Savings & Credit Co-operative Society to initially serve employees in the banking industry. The Sacco Head office is located at Kenya Bankers Sacco Center along 3rd Ngong Avenue, off Ngong Road -Nairobi. Get in touch with us on +2540205146500, email us on help@kenyabankers.coop or visit our website for more details.