Description

Fina Trust Microfinance Bank

Fina Trust Microfinance Bank is an institution offering loans for multiple purposes in Nigeria.

Products

• Micro loans – This is for entrepreneurs, traders and students to access up to N1m for existing businesses. The interest rate charged by Finatrust is a minimum of  5% with the total dependent on the tenor of the loan.
• Salary Advance – This product is targeted at salary earners at large blue chip companies and enables them to access up to 75% of their monthly salary in advance.
• Group Loan – Their Group loan is available at 3.5%. The group loan is a form of rotating credit (Esusu/Ajo). A rotating credit scheme is where a group of individuals fill the role of an informal financial institution through repeated contributions and withdrawals to and from a common fund. It is formed because accessing formal institutions is difficult due to their unavailability or because these institutions are unable to provide the appropriate service. The group loan reduces the risk to the lender which allows them to charge a lower interest rate than on a normal individual loan. The transactions can vary in occurrences as often as daily to every six months, and recipients of funds are commonly chosen based on financial need or lottery. For example, six people may agree to give N10 to a fund every month for six months. Each month, a different member of the group collects the N50 contributed by the other five members and uses it for their business expenses or personal consumption. This arrangement allows people who can’t normally raise substantial capital to have periodic access to such funds.

Pros

• Convenient repayment plan (equal monthly Principal and Interest repayments).
• Flexible conditions.
• Retail businesses may obtain funds for capital projects while repayment is done on installments.

Cons

• Guarantor required
• Maximum tenor of six months

Requirements

Group Loan

• Group members must be in the same location.
• Group guarantee.
• Two credible guarantors.