How to make money through Micro lending? In a third world country micro lending is the best way to help small entrepreneurs to finance their small business. Here, in the Philippines mostly small entrepreneur borrowing money from lending company.
For me micro lending helps people struggling from poverty. Banks require a huge amount of money and requirements before they will approved your loan. Micro lending usually does not require collateral from the borrower. It only requires the borrower and the co-maker to sign a promissory note.
In Micro lending without quasi-banking activities, you may cater to employees, pensioners, sari-sari store owners, market stallholders and OFW's. It is advisable for start ups to lend smaller amounts with short payment terms. This will make payments faster and enable you to loan out money to more borrowers. Loans could start from Php5,000.00 to Php15,000 with 3% to 5% interest per month. Payment terms can be from 2 months to 6 months. The advisable payments schemes are daily or weekly. For employees and pensioners, though, payments can be scheduled every payday or once a month. For loans of Php50,000.00 and higher, you should ask for collateral. Any item that is of value such as jewelry, real estate, or vehicle as long as borrower owns it. Yes, there is risk but do you know even driving your own car there is also risk? It is only up to you how to handle such risk. Just imagine foreign nationals like what they call Bombays are doing Micro lending here in Philippines and they are doing well. Do you know how many per cent they put on every loan? It is more than 10% per month. Please, correct me if I am wrong. Yet, there are still small business owners lending money to these Bombays. For me, it is a wise business compare if you only deposit you hard earned money to the Banks which give you low interest rate per annum minus the annual tax to be paid and the yearly inflation.
