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A Brief History of Online Microcredit

Microcredit is one of the most popular in America and Europe loan services, which has many pros and cons. In turn, speedy payday loans help draw attention to such a vast and large audience, as Internet users. What are the advantages of this type of loan? How does it come from? And what are its features?

A Brief History of Online Microcredit

Microcredit is one of the financial industry aimed at satisfying the material needs of poor people, including entrepreneurs who do not have the opportunity to get a great loan from the bank. The origins of speedy payday loans online are rooted in the distant of 70 years. Muhammad Yunus is considered to be the ancestor of micro-credits.

The professor has experienced firsthand what poverty and hunger mean. Although he got his education in the United States, his parents lived in Bangladesh, which poverty and ruin «conquered» everything. The idea to create a microfinance institution came to him in early 1974. Just then a young scientist found out one idea – even a very small financial injection will be able to solve some problems of hungry and destitute. Future banker lent 10 women the first microloan. And although the amount of the loan counted for only 27 US dollars, this event marked the beginning of further development of micro-loans as a new financial industry.
At the same time the founder of microloans created another idea – banks are not interested in speedy payday loans because of such a great risk of defaults.
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In early 1983 first microcredit organization was founded to issue speedy payday loans in Bangladesh. Since its opening, the financial institution has issued approximately 4 million loans valuing 5 billion US dollars.

Later modern and microcredit organizations began to appear. But since the Internet appearance, online microcredit organizations have emerged and were developed special loan programs for network users.

Micro-credit Online in Europe and America Today

Micro-credit market in the US and Europe was quickly mastered by the online companies. Today, this kind of business is popular not only among ordinary citizens, who want to get an online speedy payday loan, for small expenses, the purchase of equipment, etc. Moreover, the main advantage of these types of loans is the ease and speed of execution. To get know about microcredit read the article “Speedy Payday Loans: Myths about Microloans“.

When making a loan for equipment purchase the customer can rely on the sum from &100 to $1000. Interestingly, most online organizations are loyal to the business representatives who wish to improve the small restaurants, coffee shops, dental offices, hair salons, boutiques, garages, etc.

One more interesting thing is that a number of sites gives no information about the interest rates. Either item indicates – “rate is set individually.” In this case, it is not difficult to guess that the size will be approximately 3-5 times larger than the standard bank rate. For example, an online microfinance organizations in the US and Europe often give online loans with floating rates. In turn, rates in these organizations are directly dependent on the loan, the amount and the legal framework the state (or region).

What Are the Advantages and Disadvantages of Internet Microloans?

  • The main advantage of speedy payday loans is speedy rate of microcredit issuance.
  • In second place among the advantages of this type of lending is – easy registration. Filing takes place via the Internet.
  • The third advantage is the minimum package of documents.
  • The fourth advantage is the ability to get the loan money to the card, the bank account or the virtual wallet.
  • Fifth advantage is the ability to get loan for any purpose and individual interest rates. In addition, these loans can easily use the entrepreneurs who already have their own business.