More people than ever are finding it increasingly hard to access bank loans. Perhaps you have a bad credit score or inconsistent cash flow, in which case, very few banks want to work with you. It could simply be because banks have moved away from small and personal loans ever since the 2008 financial crisis – which is probably for the best. Microfinance can be a better alternative to banks and unscrupulous payday lenders when you find yourself in need of cash in a hurry. Here are five scenarios where microfinance might be the right solution for you:
Most people make use of their vehicle for their daily commute. A large segment of the population also relies on them for their very livelihood. But if that car were to break down suddenly and public transport wasn’t a viable option, a small loan would be a great solution in a tight situation. Likewise, if your car is totaled or you’re purchasing your first car, low-interest microcredit is likely what you need.
Our homes can be a significant drain on our resources. Investing in energy efficient improvements can save you a lot of money over the mid and long-term. By simply replacing the five most frequently used light fixtures around the house with energy efficient light bulbs, you can save $75 per year. Plant several trees on the sunny side of your home, and you can reduce your annual air conditioning costs by as much as 50%. Alternatively, when things go wrong, repairs and maintenance can put a horrific dent in an already tight budget. Access to a ready source of cash can ensure that you can keep your home in shape without plunging yourself into unmanageable debt.
The US, like most of the rest of the world, is experiencing an all-time low in the number of marriages per year. Primary amongst the reasons cited for couples delaying or deciding not to embark on marriage altogether is the spiralling costs, coupled with stagnant or shrinking real wages. Even modest weddings can still cost thousands that young couples simply don’t have. Accessing a small loan can allow you to have that wedding about which you’ve been dreaming.
Spending money on your education is always a sound investment, no matter the age. Statistics show that the average college graduate with a 4-year bachelor’s degree earns twice as much money throughout his or her life as someone with a high school diploma alone. However, starting school does require some initial financial investment which can be prohibitive. This is one of those times when microcredit might just come in handy by helping to get you into the system so that you can pursue your goals and achieve your potential through higher education.
Just like your car breaking down in the middle of the road, or a mind-numbing toothache in the middle of the night, or even a pipe bursting when you’re not at home, all can bring on some unforeseen expenses for which you might not have planned. And if you don’t have a rainy-day fund put aside, like 78% of all working Americans, then something seemingly as insignificant as a twisted ankle or a broken fridge can turn into a financial struggle.
Microfinance has been around for a very long time and with good reason too. Many are nonprofit organizations looking to help out the little guy wherever he may need some assistance. Do your research, and you may find that you qualify for that leg up that will help get you on financial track without trapping you in the high-interest debt cycle.