When one is interested in finding out more about microfinance in South Africa, they should know that it is only available to financially assist low income customers like those who are self-employed, the poor and other consumers. It allows many poor households to have easy access to high quality financial services like credit, insurance, savings, fund transfers and loans. Everyone has to borrow money at some point in their lives, whether want to lend from the banks or personally from a family member, there is the time when we all just need a boost. Lending money isn’t always easy to do, especially if you have a bad credit rating, but it can normally be done.
Many believe that the less fortunate people of our country can be helped out of poverty by making use of and promoting microfinance in South Africa. When lending from banks, they traditionally were not able to provide any type of financial services to those who didn’t have a cash income or bad credit. In order to borrow money you had to already have money basically, so that the bank can see that you will be able to pay it back. By having credit you also had a better chance of applying for loans and more credit on top of other credit you already had.
It was also difficult for poor people to get financial assistance from banks because they didn’t always have much to give as collateral, or they do but nothing that was worth enough value. Anyone that lives in the city in a nice house can go into the bank and apply for a loan without a second glance, but if a obvious poor person had to do the same, they will more than likely be turned away. This is the reason why others thought it was important to introduce something like microfinance in South Africa, to help those who really need it.
Beware of Internet Loan Sharks
Beware of internet loan sharks! Anybody will tell you this and it should not be ignored. You should beware of those lenders that will go around offering loan credit to anyone that applies. These are the lenders that are not easy to track down. They provide just enough information about their company, but it is not enough. You might also find that these lenders are located in another country and not in your own. These lenders are also subject to the regulations and the laws, but the authorities fail when trying to enforce these laws against them. This is because they cannot be located easily compared to the more legitimate loan programs offered from offices.
Payday loans are also part of the whole scam, and again, beware of internet loan sharks, because each month a certain amount is taken from your account. These are finance interest charges.
Where it starts causing you trouble is when the loans are renewed every month. This forces the borrower to not make the full repayment on the loan and eventually pushes the borrower into deep debt. This normally occurs after a few months when the outstanding amounts keep growing and growing due to the unreasonably huge charges.
You will find that you have to fill out the application online and this is how you sign up for the payday loan. In this application you are asked to provide personal information such as bank account details and identification details. All this information is sent to a person you are never going to see in your life and a person that is impossible to locate. This means that your privacy and security is at risk. If you are providing this information over unsecured websites, it makes it even more dangerous. Beware of internet loan sharks and rather go to your bank and acquire the loan that way.