The difference between an microfinance organization and a credit organization. The principle of operation of microfinance organizations with microloans Who belongs to microfinance organizations
Microfinance organizations
In accordance with the Federal Law of the Russian Federation dated July 2, 2010 No. 151-FZ “On microfinance activities and microfinance organizations,” a microfinance organization (MFO) can become a microfinance organization (MFO) registered in the form of a foundation, an autonomous non-profit organization, an institution (with the exception of budgetary institution), non-profit partnership, partnership or business entity.
Moreover, such an organization will be able to begin carrying out microfinance activities only after entering information about itself into State Register MFO.
The status of a microfinance organization gives the right to:
Provide borrowers with microloans in an amount not exceeding 1 million rubles. MFOs can issue such loans to small businesses, individual entrepreneurs and citizens;
Request from the borrower documents and information necessary to resolve the issue of providing a microloan and fulfillment of obligations under the microloan agreement;
Reasonably refused to enter into a microloan agreement;
Carry out other activities along with microfinance activities, taking into account the restrictions established by law, including issuing other loans and providing other services in the manner prescribed by federal laws and constituent documents;
Raise funds in the form of loans, voluntary (charitable) contributions and donations, as well as in other forms not prohibited by federal laws, subject to the restrictions established by law.
MFOs have the right to provide information they have on borrowers to credit history bureaus.
A microfinance organization does not have the right to:
Attract funds from individuals, except for individuals who are founders of microfinance organizations, as well as those providing funds to the organization on the basis of a loan agreement in the amount of 1.5 million rubles or more under one loan agreement with one lender;
Act as a guarantor for the obligations of its founders;
Without a preliminary decision of the highest management body of the microfinance organization, enter into transactions related to the alienation of property owned by the organization or otherwise entailing a decrease in the book value of the microfinance organization’s property by 10 percent or more of the book value of assets determined according to the financial statements for the last reporting period;
Issue loans in foreign currency;
Unilaterally change interest rates and the procedure for determining them under microloan agreements, commission fees and the validity periods of these agreements;
Apply penalties for early repayment of a microloan to a borrower who is an individual (including an individual entrepreneur) who has repaid the microloan early (in whole or in part) and has previously notified the MFO of such intention in writing at least 10 calendar days in advance;
Carry out any type of professional activity in the market valuable papers;
Issue microloans to the borrower if the amount of his obligations to the microfinance organization under microloan agreements in the event of such a loan exceeds 1 million rubles.
Supervisory functions in the microfinance market are carried out by the Federal Financial Markets Service. It develops legal regulations in this area.
As of November 8, 2011, there were 757 microfinance organizations listed in the state register, including Microfinance LLC, Domashnie LLC, Quick Loan LLC, Microloan LLC, MigCredit LLC, etc.
A number of microfinance organizations interact with banks, for example, the Microfinance agency was created with the support of VTB 24.
See what “Microfinance organizations” are in other dictionaries:
Microfinance- (English microfinance) is a type of activity associated with the provision of financial services, as a rule, to start-up small businesses and is an effective tool in achieving freer access for small businesses to... ... Wikipedia
Microfinance- Microfinance is a financial industry dedicated to providing basic financial services to poor people who cannot qualify for conventional financial services. A key part of microfinance is... ... Wikipedia
- (microcredit) – a short-term loan for a small amount issued to the borrower without collateral or guarantee. Microfinance has existed in the world for more than 30 years. In 1983, in Bangladesh, Muhammad Yunus founded Grameen Bank, which became... ... Banking Encyclopedia
ILM- World Microentrepreneurship Awards (abbr. VPM; English Global Microentrepreneurship Awards (Programme), GMA) is a global charitable initiative supported by the UN, designed to highlight the contribution of microcredit and ... ... Wikipedia
financial markets regulator- State regulatory body, whose competence includes control over the circulation of securities, the adoption of normative legal acts at the legislative level, the purpose of which is to increase control and exercise supervision in the work of financial... ... Technical Translator's Guide
Microentrepreneur- (English microentrepreneur) an entrepreneur with modest income, who in his own way financial situation unable to use commonly used financial services. This is a common form of employment in developing countries. Term... ... Wikipedia
Microentrepreneurship- Microentrepreneur (eng. microentrepreneur) is an entrepreneur with a modest income, who, due to his financial situation, is not able to use commonly used financial services. This is a common form of employment in developing... ... Wikipedia
The needs of representatives of modern society often require significant expenses and investments. Of course, not every average person has an income level high enough to cover any needs without auxiliary resources. It is in this case that microfinance organizations become relevant. Such companies make easy and fast lending possible.
What is meant by microfinance organizations?
There are many different structures whose purpose is to carry out various financial transactions. Issuing loans or loans is one of the most common activities of such companies. Answering the question “microfinance organizations - what are they?”, it is worth noting the following fact: the activities of such structures are actually completely similar to banking. The difference lies in the regulatory system, operating rules and standards on the basis of which such companies issue funds.
In essence, microfinance is aimed at providing various services that are relevant both for entrepreneurs starting their own business and for average people. The advantage of such companies is that they can issue certain funds without a credit history and many of the conditions that apply to banks. This means that it is much easier to get money from microfinance organizations. It is important to understand the following fact: the activities of such organizations are supported by the state, which has a direct impact on the level of trust in them. Therefore, those who ask themselves questions about whether microfinance organizations are reliable, what they are and whether it is worth using these services can confidently contact such structures, since they are completely legal.
More about reliability
One of the best ways To determine whether a particular microloan company should be trusted is to refer to the rating of organizations in this profile. This can be done by using the services of a rating agency, for example, Expert RA. This information will help you find out which companies are faithfully meeting their current financial obligations.
The value of this assessment lies in the fact that it is independent, and therefore objective and, as a result, reflects the real situation. In this regard, you should not neglect the individual rating of companies operating in the microloan format.
What the general public should know
First of all, every company that falls into the category of microfinance organizations must be entered into the State Register. To find out whether registration took place, it is worth visiting the official website of the Bank of Russia, where this data is freely available. Moreover, it wouldn’t hurt to pay a visit to the office of a specific microfinance organization. This is where the certificate of registration in the State Register should be placed.
Important information about existing responsibilities
In fact, any state microfinance organizations and private companies have certain obligations to clients:
- When issuing loans, each MFO must use one tabular form of the agreement, without changes.
- Any company has an obligation to disclose to its customers the full cost of the loan provided. This means that every citizen has the right to find out what percentage he will have to overpay during the entire loan repayment period. Such information is very useful when choosing a specific offer. Another important fact is that at the time of signing an agreement, say, for a consumer loan, its total cost cannot exceed the average market value calculated by the Bank of Russia by more than a third.
- There are much more reasons to trust a particular microfinance organization if it is a member of one of the following (membership information is usually located on the company’s official website).
- Each MFI must provide its clients with time to make a decision (5 days).
In addition to the question “microfinance organizations - what are they?”, it is useful to understand the essence of a microloan. In fact, the size of which does not exceed 1 million rubles. You can receive this amount on loan terms legal entities, and individuals.
Types of microloans
All loans issued by MFOs can be divided into several types. It’s worth starting with a consumer microloan. It is designed to require a certain amount to cover your personal needs. Most loans of this type are issued for a period of up to 6 months, although in some cases installments for 2 years are possible.
Microloans aimed at entrepreneurs are limited to 1 million rubles and are allocated for purposes related to opening, supporting and developing their own business. The loan term in this case ranges from 1 to 3 years. Collateral is almost never provided, but it is necessary to collect a complete list of documents that the MFO requests.
There are also microloans designed for very short periods, and they are issued to individuals. With the help of such loans, issues related to unforeseen costs are resolved or, for example, Such loans are issued very quickly, but at the same time have the highest interest rate.
MFOs in Russia
Nowadays microcredit has become more than popular in the CIS. This is due to such facts as the increasing severity of the conditions under which banks agree to lend, and the significant growth of the shadow sector of the economy. Many borrowers do not consider cooperation with banks relevant and turn to the possibility of microcredit.
If you pay attention to microfinance organizations in Russia and the beginning of their activities, it is worth noting that the MFO Institute was created in 2010. It was this law that allowed borrowers and credit institutions to carry out their activities legally.
Supervision functions of MFOs in this moment carried out by the Central Bank, applying to them only 2 key standards: and the sufficiency of own funds.
Nuances worth knowing about
In order to protect small businesses and the population from dishonest schemes, a law was adopted that somewhat restricts microfinance organizations in their activities: maternal capital can no longer be a means of repaying the loan.
Consumer cooperatives also received temporary restrictions. They can work with maternity capital only if they have been operating for 3 years. Such measures have one simple goal - to minimize the percentage of fraudulent schemes. Many microfinance organizations withdrew maternity capital illegally (951 cases). Such illegal practices should not take place in the financial services market.
Those who predicted that microfinance organizations would be closed will have to come to terms with the opposite fact - such companies will continue to operate.
What else can an MFO offer?
It is important to understand that the activities of microfinance organizations are not limited to providing loans. Quite often, MFOs present ordinary people and entrepreneurs with the opportunity to invest their own funds at certain interest rates. However, it would be incorrect to consider this type of investment as a contribution. The peculiarity of such investments is that they are not insured by the state. That is, clients do not have legal guarantees that their investments will be saved.
To answer questions about whether microfinance organizations are relevant today, what they are and how safe it is to use their services, the following idea can be noted: such companies, being legal, are able to provide fairly convenient lending conditions. Given this advantage, do not forget about checking documents and possible fraud related to maternity capital.
The market for financial instruments is currently actively developing. New, previously unseen structures are appearing. Some of the most controversial are microfinance organizations.
general information
Microfinance organizations in Russian Federation- new this decade. In general, we can say that they are a product of the third millennium. They were permitted by Federal Law No. 151-FZ of July 2, 2010 “On microfinance activities and microfinance organizations.” What are they?
According to the law, microfinance credit organizations are legal entities that are registered in the form of a foundation, institution, autonomous non-profit organization, partnership, partnership or business entity. The main thing in their work is to obtain a certain status. What does he give?
Possibilities
Proper classification and permission for such activities appears only after the entity is added to the register of microfinance organizations. The resulting status allows you to:
![](https://i2.wp.com/syl.ru/misc/i/ai/284485/1549773.jpg)
But they can do this only after the relevant information has been added to the register of microfinance organizations.
Restrictions
Now let's talk about what microfinance organizations cannot do:
![](https://i0.wp.com/syl.ru/misc/i/ai/284485/1549775.jpg)
Control
The Federal Service for Financial Markets monitors compliance with all rules. Therefore, if microfinance organizations commit certain violations, then it is these officials who need to be notified. The Ministry of Finance develops legal regulations. At the moment, there are several hundred microfinance organizations operating. It should be noted that although they perform work similar to banking, they are regulated and operate according to different standards and rules.
Who is addressing them?
Who are the clients of microfinance organizations? These include individuals and legal entities who, due to certain circumstances, were unable to obtain the required amount from banks. The reason for this state of affairs may be a bad credit history, its absence, administrative or other offenses.
It should be noted that the demand for these services, despite not very favorable conditions, is constantly growing. This is largely due to the simplicity and speed of receiving amounts, which is used by many who do not know how to count money before payday. It is also worth noting flexibility regarding clients. Thus, people are often not required to provide income certificates, various documents confirming their solvency and many other documents. For many microfinance organizations, only having a passport is enough. Therefore, more and more people are taking out loans from microfinance organizations. But how justified is this from an economic point of view?
Let's say a word about the financial aspect
It should be noted that the market segment where MFOs operate is considered potentially dangerous in terms of non-repayment of debts. Therefore, a loan from a microfinance organization is accompanied by significant interest. They largely depend on the greed of the owners and their willingness to take risks in cash. Thus, most microfinance organizations operate in the range from 0.5 to 2 percent per day. A deviation from these indicators is also possible, both upward and downward.
But let's assume that the loan is issued at two percent per day. If it is taken due to force majeure for several days, then it can still be survived. But when applying for a loan for a longer period, say for a year, you should take into account that then you will have to pay over 700% for its use! Can you imagine how much this is? Banking institutions never dreamed of such profits. True, one should still take into account the high risks of non-refund of funds in such cases. It should be noted that many microfinance organizations have their own loyalty programs, as a result of which, after long-term use borrowed money and positive experience the rate decreases. As a rule, the bottom in microfinance institutions is about 0.1-0.3 percent per day. If you take the minimum (0.1%), then you will have to overpay only 36.5% per year, which is not much more than regular bank loans. But how much will you have to pay before that? The amounts are simply fabulous! That's it, after all A loan from a microfinance organization is expensive.
Conclusion
Finally, I would like to talk about such an aspect as debt repayment. Not only do you have to significantly overpay in this case, but there is also a risk of running into problems with the negative side of the activities of these structures. So, MFOs have quite a lot of bad loans. Therefore, if the amount is not repaid, they either begin to put pressure on the borrower, or transfer information about him to third companies (collectors).
It should be noted that methods of influence are often on the border of the law, or even even cross it. You can often encounter psychological violence or damage to property. The first, alas, is not considered a crime by modern legislation until it takes on monstrous forms such as incitement to suicide. In any case, it is necessary to pay attention to such inappropriate behavior of regulatory authorities, since there are civilized methods of resolving disputes - in the courts.
The first microfinance organizations (MFOs) appeared in Russia in the 90s. Since that time, their number has grown from several dozen to 2.5 thousand companies. The majority of the country's population is familiar with the concept of “payday money”, but not many know thoroughly what an MFO is.
MFO - what is it?
Microfinance companies are commercial (less often non-profit) organizations that provide lending to individuals and legal entities, including individual entrepreneurs. MFOs are not banks, but just like them they are accountable to the Bank of Russia. The financial firm must be registered as a legal entity, the data of which is entered in the state register of microfinance organizations. Credit companies operate on the basis of a license, without which lending occurs illegally.
Types of microfinance organizations
Since March 2017, microfinance institutions have been officially divided into two types: microfinance and microcredit. What is a microfinance organization in the Russian Federation:
- Has an equity capital of over 70 million rubles.
- Can issue loans in amounts up to 1 million rubles.
- Has the right to issue bonds.
- Can attract investors.
- Has the right to issue loans remotely via the Internet.
Depositors are registered with the IFC as investments and have several fundamental differences from bank deposits. The minimum deposit amount is 1.5 million rubles. There is no state insurance for such investments, but at the client’s request, a microfinance company can arrange insurance for a fee. Interest rates range from 15 to 60% per year. The deadlines are set individually for each investor.
Microcredit companies include legal entities with equity capital of less than 70 million rubles. They are deprived of the right to carry out any activities other than lending to borrowers. Loans are issued in an amount of no more than 500 thousand rubles. You can only attract clients via the Internet, but not fill out an application.
Restrictions for MFOs
Credit institutions are subject to a number of restrictions due to the specifics of their activities, as well as to protect consumers. MFOs are prohibited from:
- Issue loans in foreign currency, all contracts are executed only in rubles.
- Carry out professional activities in the securities market.
- Issue loans via the Internet if the loan amount is over 15 thousand rubles. For complete identification, the client must visit the office or personally meet with a company representative in any other location.
- Issue the next loan to the borrower if the amount under all contracts exceeds 1 million rubles. or 500 thousand rubles. depending on the category of the lender.
- Charge excessive penalties. The maximum amount of fines cannot exceed two times the initial amount of the total debt.
The legislative framework
Despite the long history of the development of microcredit, state control of companies was systematized not so long ago, namely on July 2, 2010, when the Law “On Microfinance Activities of Microfinance Organizations” was adopted. The document clearly outlines the rights and obligations of the parties to the lending process, as well as the specifics of the creation and activities of such companies.
Microfinance organizations are separate legal entities not associated with banking regulations, which in the recent past scared off borrowers with high interest rates and penalties. Thanks to amendments to the Law, which came into force on January 1, 2017, interaction with microfinance organizations has become more transparent and secure for potential clients.
The maximum loan amount is limited to three times the amount of the initial loan, and in the event of a delay, the amount of interest cannot exceed two times the amount of the loan.
In 2013, by the Law on Consumer Credit (Loan), the Bank of Russia obliged each financial company to publish the full cost of the loan in the loan agreement. The form of the agreement, including its tabular part, must be the same for each borrower.
Selecting an MFO
After the latest legislative updates, the number of microfinance organizations has decreased from 3.5 to 2.5 thousand companies. Of these, 10-13% operate on the Internet.
When choosing an MFO, it is important to check it from a legal point of view. Companies are required to provide information about state registration at the first request of the client. If a company is a member of any self-organized credit organization, this increases the level of its responsibility to borrowers. You can view the documents on the organization’s website or at their office.
In addition to official statements, it is important to study informal information about MFOs - reviews, stories from the practice of borrowers. It is important that positive responses outweigh negative ones, but do not look like overt advertising.
Another factor determining the borrower’s choice is overpayment on the loan. To calculate it, you can use calculators on company websites or the help of specialists in offices. You can independently calculate the final overpayment using the formula:
- loan amount * rate / 100 * term.
For example, the loan amount is 10,000 rubles, the term is 15 days, the rate is 1.7%. We get: 10000*1.7/100*15 = 2550 rubles. For 15 days of using the money, the client will owe 2,550 rubles.
Types of microloans
Microfinance companies offer several types of loans, depending on the amount and intended use of the funds:
- Loans for entrepreneurs. The contract is drawn up for an amount of up to 1 million rubles. This amount allows you to start a business, increase working capital, purchase new fixed assets or cover overdue debts to creditors. Legal entities or individual entrepreneurs can apply. The loan term varies from 1 to 3 years. The average market rate is 48% per year.
- Consumer microloans. Loans are issued with similar limits - up to 1 million rubles. Lending duration – from 1 to 6 months. As a rule, such loans are issued for the purchase household appliances, carrying out repairs, paying for training, treatment or recreation. The average rate on the lending market is 15-20% per month.
- Express microloans. This type of loan means payday loans. This name came from the people and was firmly entrenched in the marketing materials of companies. A mini-loan is issued for a period of several weeks to one month, and the loan amount is limited to 30-50 thousand rubles. There is a fee for servicing the loan - 1-2% per day.
Processing microloans
Once the borrower has decided on a lending company, he can apply for a loan. If the registration takes place in the office, then the company manager fills out the form, where the client signs the contract and can even receive money. If the borrower plans to apply online, he first needs to register on the organization’s website and upload copies of his documents. After this, access to filling out the application opens. MFOs provide loans to citizens of the Russian Federation who:
- have reached 18 years of age;
- registered on the territory of the Russian Federation;
- have a stable income;
- can provide contact phone numbers.
To obtain a microloan, you usually only need a passport, but some companies may request other documents: international passport, pensioner/driver/military ID, etc. The questionnaire consists of several information blocks:
- Personal Information.
- Passport details.
- Contacts and addresses.
- Information about relatives and their telephone numbers.
- Sources and amount of income.
- Existing property and loans.
- Desired loan parameters.
The application is verified from 1 minute to 1 day, depending on the company and the loan amount. Internet loans are issued within half an hour. The client has the opportunity to independently choose the method of receiving money: to a card, bank account, electronic wallet or at cash issuing points (offices of microfinance organizations or money transfer companies).
Amortization
Payment of the debt occurs one-time or after a period of time specified in the contract– it depends on the type of loan. The borrower has the right to repay his debt ahead of schedule and demand recalculation of interest for the actual time of using the money. Each MFO is obliged to fulfill such client requirements on the basis of Russian legislation.
In addition to early repayment, many companies practice contract extension or restructuring. Extension of the loan can be carried out for an additional fee (one-time commission) or with an increase in the rate (usually by 0.1-0.5% per day). Thanks to this service, borrowers can avoid delays and a decrease in credit rating. A minority of creditors offer debt restructuring. The procedure includes stopping the accrual of penalties and paying the debt in installments over a designated period.
Like banks, microfinance organizations have a system of penalties. For failure to fulfill debt obligations on time, the borrower may be charged a fixed fine and a daily penalty. According to the legislation of the Russian Federation, data on microloans is transmitted to the credit bureau once a week. A delay of even one or two days can affect the client’s credit history.
Resolving controversial issues
After processing a loan, conflict situations often arise between the client and the lending company. This may be due to inflated interest rates, hidden fees or large fines. You can solve the problem in the following ways:
- Check the presence of the company in the MFO register. If the registration number is missing, then the company is operating illegally and you must contact the prosecutor's office.
- File a complaint with a special organization/institution. There are several options here: a self-regulatory credit organization, the Bank of Russia, Rospotrebnadzor, the Federal Antimonopoly Service.
- Go to court.
The listed recommendations can be applied simultaneously or gradually, awaiting the response of the microfinance company. Complaints can be submitted online or sent by registered mail. The best option is to independently resolve conflict issues between the parties to the contract.