What kind of loans are there?

MFIs offer a variety of microfinance loans.

Be aware that the different MFIs do not always offer the same loan types or the same loan conditions. Read the fine print and seek independent financial advice

Group Loan:

Also known as a solidarity loan, this loan type brings together customers in the same business (often a farm) to borrow together and be liable together for repayment. An advantage is that no physical security is required.

Individual / Business Loan:

This type of loan is ideal for individuals who would like to start a business or expand on their current one and need money to do so. Some MFI’s will allow a grace period before repayment begins to allow the customer time to make money to pay it back. Security is usually required, either a physical title to land or a guarantee from another person. 

Consumption / Education Loan:

This loan is for individuals who require access to money outside of the opening or expansion of a business. It can help provide for a variety of purposes, including a vehicle, a computer, furniture, or school tuition. This type of loan generally does not require security, although this can result in a higher interest rate charged. 

Home Improvement Loan:

Used for an individual wishing to improve a home they already own, through repairs, decorations or additions. House improvement loans usually require the customer to provide their house and land title as security for the loan.