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What Micro-Lending Is And How You Can Benefit From It

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What Micro-Lending Is And How You Can Benefit From It

What Micro-Lending Is And How You Can Benefit From It

Micro-lending has been a hot topic in the financial industry for years. But for all its popularity, many people still aren’t familiar with what it is and how it works. In this article, we’ll explain why micro-lending is so good for both individuals and the economy as a whole.

Even more importantly, we’ll tell you how to get involved in micro-lending yourself and reap plenty of rewards along the way.

 

What is Micro-Lending?

A Micro-Lending or micro-loan is a small loan that is made to an entrepreneur, business or non-profit organization by a lender.

Micro-lending is a form of micro-finance. In this case, “micro” refers to the size of the loan and “finance” refers to the type of financing that takes place. Microloans are small loans made to entrepreneurs, businesses, or non-profits by lenders. They’re typically used for start-ups and growth capital rather than working capital needs.

In contrast with traditional lenders who focus on large projects with high returns, microloan companies lend money at low interest rates because they expect their borrowers to repay their debts in full without risk or collateral; thus they’re able to offer credit services more efficiently than other types of lenders.

What Micro-Lending Is And How You Can Benefit From It

Micro-lending can be used by both domestic and international borrowers.

Micro-lending is available to both domestic and international borrowers. While you may have only heard of microfinance companies helping people in developing countries, these entities actually exist all over the world. Microfinance institutions (MFIs) can be found online or in your local community, regardless of where you live.

You don’t need to visit a microfinance institution’s headquarters or meet with an MFI representative in person if you’re interested in applying for a loan from them; many offer their services online now too. The application process takes just minutes, so it doesn’t matter if you’re applying at home or on the road—you’ll be able to get started right away!

It’s also worth noting that some MFIs offer loans on an installment basis rather than providing one lump sum payment up front; this means borrowers will make monthly payments instead of paying everything upfront at once. If you’re someone who likes having options when it comes time making payments towards your debts (or any type of credit), then this feature might appeal directly towards your needs as well!

The purpose of micro-lending is to extend credit to people who are underserved by traditional financial institutions.

Micro-lenders often work with people who have bad credit or no credit, but who have a good business plan. These lenders can be non-profit organizations or for-profit companies. They’re more flexible in their criteria for granting loans than banks are. In some cases, you don’t even need collateral!

Micro-loans can be used for all kinds of things: starting a business, buying equipment and supplies, paying off bills (particularly medical bills) so that you can get back on your feet after an illness or injury—whatever it takes to help someone get back on track financially.

 

Get started with Micro-lending

Micro-lending can help you get started on a new business venture even if you have not been in business before and/or have bad credit.

Getting started on a new business venture is not as easy as it used to be. With so many options available, it can be difficult to know which one is right for you. If you are thinking about starting up your own business, micro-lending may be able to help you get off on the right foot.

Micro-lending allows small businesses and entrepreneurs with limited credit and collateral to secure loans that they might not otherwise qualify for at traditional banks or lending institutions.

Micro-loans are generally much smaller in size than most other types of loans, but they can make all the difference when starting up a new business or improving an existing one.

In fact, many economists believe that micro-lending has helped spur economic growth by giving small businesses access to capital they otherwise would not have been able to obtain through traditional means.

Funds received from micro-lenders may be used for almost any purpose including buying inventory, supplies and equipment as well as for operating expenses.

Benefits of Micro-Lending

Micro-lending can be used for almost any purpose. A business that uses micro-lending to expand its inventory, supplies and equipment is able to maintain lower prices. The resulting lower prices make the products even more attractive to consumers who in turn buy more of them.

So you want a new car? Micro-lenders can provide access to capital for buying new cars, trucks or vans. Micro-lenders also provide financing for repairing vehicles damaged by accidents or other mishaps so that owners can drive their cars again safely and legally.

Micro-lending can help you get the funding you need for your business when traditional sources have said no

Micro-lending is an excellent way to get the funding you need for a business or other type of new venture. Traditional sources of capital may not be interested in lending to you, but a micro-lender might welcome the opportunity.

Roadblocks to getting a Micro-Lending

There are many reasons why your small business may have trouble getting funding from traditional lenders.

Perhaps your credit score is low, or maybe you don’t have enough collateral to secure a loan. Maybe the bank doesn’t think that your product will sell well enough to pay back the loan with interest.

Whatever the reason, it’s frustrating when banks reject your application for lack of assets or poor credit history—but micro-lending could be just what you need!

 

Starting up a Micro-Lending business in Nigeria

When you’re ready to get started, here are the first steps:

  • Company name reservation
  • CAAC 1.1 pre-registration form
  • Stamp duty certificate
  • Payment of filing and stamp duty fees
  • Uploading of requested documents, which includes: CAC1.1, MEMART, Form of Identification for directors and Secretary
  • Proficiency certificate
  • Evidence of CAC payment
  • Submission of the original documents to any official CAC office

 

The Central Bank of Nigeria (CBN) is the sole regulator of micro lending business in Nigeria. As a result, all microfinance institutions in the country are required to adhere to the CBN’s Micro Finance Policy which was last updated in 2017. The policy mandates that all MFIs must have at least N25 million as capital base and are required to register with their respective regulatory bodies before starting operations.

In addition, there are two other laws that govern micro lending business in Nigeria: Federal Capital Territory Financial Inclusion and Accessible Credit Act 2016 as well as National Policy on Microfinance Institutions (NPIMFI). These laws also set out minimum capital requirements for MFIs with branches within each state or federal territory respectively

MFB licence

A Microfinance Bank (MFB) licence is one of the most important documents a micro lending company needs to operate in Nigeria. Without it, you cannot start a business as a micro lender.

  • What is a Microfinance Bank Licence?

This document is granted by The Central Bank of Nigeria (CBN) under the CBN Act 2015, and it gives you permission to operate as a micro lender. As part of your application process, you will be asked to provide information about your banking history, including previous loans granted and defaulted on. If these numbers show that you are trustworthy and capable of paying back your clients with their loans plus interest rates on time every single month for years at least—you might just get approved!

 

  • Operating without MFB licence

You are operating a microfinance business without a licence. This is illegal, and you could be imprisoned or fined. You cannot apply for a microfinance business licence with MFB, the Microfinance Banks Association of Nigeria (MBA). Furthermore, you cannot be part of the MBA if your business has not been licensed by MFB; this means that if your company were to be caught operating without a license, it would also be expelled from being part of the association.

Managing micro lending business in Nigeria

The success of any business depends on the sound management of risks and a good governance structure. These are the main areas that you need to focus on when starting or running your micro lending business in Nigeria.

Have a sound business plan: A good business plan outlines all the essential elements of your business, including its objectives, strategies and resources required to achieve them. It also provides an estimate of costs associated with starting up and running your project as well as measuring its profitability (or loss) over time.

Have a management team: You need to have capable people who can lead your team members towards achieving their goals by providing guidance on how best they should proceed with their work every day so as not only grow but also remain competitive in this market which is highly dynamic due to changes in technology among other factors that affect businesses’ performances at different levels such as local/national markets.”

Conclusion

Micro-lending is a great way for those with limited financial means to access the resources they need. It has become a popular form of support in recent years, and is something that you may consider if you are looking for a small loan to tide yourself over until payday or help out with some unexpected expenses.

If this sounds like something that might benefit you, then do some research into finding out what micro-lenders are available near where live so they can get started today!

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African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises (SMMEs) and Boost Trade

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African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises

The African Development Bank Group (www.AfDB.org) and Standard Bank Group (SBG) on Monday signed a landmark financial agreement to enhance funding for small, medium, and micro enterprises (SMMEs) and expand trade across Africa.

The agreement includes a R3.6 billion investment in a social bond and a $200 million Risk Participation Agreement (RPA) for Standard Bank of South Africa Limited (SBSA). This initiative strengthens Standard Bank’s lending capacity, ensuring greater access to finance for SMMEs, a critical driver of economic growth and job creation in South Africa.

African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises

African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises

The social bond investment promotes inclusive economic development, particularly for SMMEs with a turnover below R300 million and loan sizes under R40 million. This financing will support up to 4,000 businesses, helping them scale operations, create jobs, and contribute to economic resilience.

Kenny Fihla, Deputy Chief Executive Officer of Standard Bank Group and Chief Executive Officer of SBSA, welcomed the investment, stating: “This landmark partnership strengthens our ability to support SMMEs, the backbone of South Africa’s economy. With approximately 3.2 million SMMEs accounting for 60% of jobs, ensuring access to finance is crucial. This initiative aligns with our Sustainable Finance Framework and our commitment to financial inclusion.”

In addition to the social bond, the $200 million RPA enhances trade finance across Africa, focusing on Low-Income Countries and Transition States. This agreement enables local banks to increase lending by sharing risk, bridging the trade finance gap, and promoting intra-African trade.

African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises (SMMEs) and Boost Trade

African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises (SMMEs) and Boost Trade

Leila Mokaddem, Director General for Southern Africa at the African Development Bank, highlighted the broader impact: “This collaboration marks a significant milestone in our long-standing partnership and is a testament to our shared commitment to supporting SMMEs’ growth and enhancing trade finance across Africa. Expanding financial inclusion and trade opportunities empowers businesses to drive economic transformation and regional integration. The Standard Bank Group remains a strategic partner in our shared vision for economic development on the continent.”

This initiative aligns with the African Development Bank’s Ten-Year Strategy (2024–2033), which prioritises industrialisation, regional integration, and improving the quality of life in Africa. It also supports Standard Bank’s Sustainable Finance Framework, reinforcing both institutions’ commitment to fostering green and inclusive growth.

“We are proud of this transaction, demonstrating our shared commitment to sustainable financing. By supporting businesses, we create long-term economic opportunities and financial resilience,” stated Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank.

Kenny Fihla reaffirmed the significance of the collaboration:

“By providing much-needed capital, we are helping enterprises overcome challenges and thrive. This partnership illustrates the power of collaboration in driving meaningful economic and social change in Africa.”

 

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The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

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The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

The International Islamic Trade Finance Corporation (ITFC) (www.ITFC-IDB.org), a member of the Islamic Development Bank (IsDB), has reinforced its position as a key player in the Islamic syndications market, achieving prominent rankings in the 2024 Bloomberg and Refinitiv League tables.

The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

For the fourth consecutive year, the ITFC top-tier performance reflects a strategic focus on delivering impactful trade finance solutions. For 2024, Refinitiv ranked ITFC as Globally # 1 Bookrunner and Mandated Lead Arranger (MLA) in their Islamic Syndications League table. Additionally, and Bloomberg also ranked ITFC among the top Bookrunners and MLA in the Islamic Syndications League table. These rankings are a testament to the ITFC ability to consistently deliver value-driven results and maintain a strong position among leading international and regional financial institutions.

The recognition from Refinitiv and Bloomberg confirms that ITFC is a key player in facilitating trade among OIC member countries. This not only reaffirms the ITFC status as the pre-eminent provider of trade solutions but also underscores its remarkable ability to draw investments from a wide spectrum of global investors and financial institutions.

Additionally, it emphasizes the positive impact on the lives and livelihood of people inherent in the ITFC business operating model, demonstrating its effectiveness in meeting the unique financial needs of OIC member countries.

The Refinitiv and Bloomberg League tables rank banks and financial institutions based on their performance in loan syndications, bonds, and mergers and acquisitions (M&A) transactions. The rankings, including arrangers, bookrunners, administrative agents, and advisors, are published quarterly and annually.

Distributed by APO Group on behalf of International Islamic Trade Finance Corporation (ITFC).
About the International Trade Finance Corporation (ITFC):
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the primary objective of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving socioeconomic conditions of the people across the world. Commencing operations in January 2008, ITFC has provided more than US$83 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs. With a mission to become a catalyst for trade development for OIC member countries and beyond, the Corporation helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity building tools, which would enable them to successfully compete in the global market.
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Afreximbank and Kenyan government ink milestone agreements to promote industralisation

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Afreximbank and Kenyan government ink milestone agreements to promote industralisation

Afreximbank will finance the development and operationalisation of industrial parks (IPs) and special economic zones (SEZs) to bolster the country’s industrialisation and export manufacturing

African Export-Import Bank (Afreximbank) (www.Afreximbank.com), Africa’s foremost trade development Bank, today in Mombasa, Kenya, ratified a series of initiatives designed to support Kenya’s industrialisation and export-led development agenda. Under the terms of the initiatives, formalised at a signing ceremony with the Kenyan authorities, Afreximbank will finance the development and operationalisation of industrial parks (IPs) and special economic zones (SEZs) to bolster the country’s industrialisation and export manufacturing.

Afreximbank and Kenyan government ink milestone agreements to promote industralisation

Afreximbank and Kenyan government ink milestone agreements to promote industralisation

The proposed industrial parks, to be developed by Afreximbank through its affiliate company, Arise Integrated Industrial Platforms (Arise IIP), will create and sustain an environment in which export-oriented industries can thrive, by leveraging economies of scale, shared infrastructure and access to global markets.

Two projects to be undertaken by Afreximbank, with the support of the Government of Kenya and other strategic collaborators, are the development of the Dongo Kundu Integrated Industrial Park and the Naivasha Special Economic Zone II (Naivasha II), for which, having secured leases of the relevant land, Afreximbank intends to leverage the expertise and experience of Arise IIP, a special economic zone developer with experience in the development of integrated industrial parks in Africa.

Both the Dongo Kundu Integrated Industrial Park and the Naivasha Special Economic Zone II are included in the Fourth Medium Term Plan (2023-2027) of the Kenyan government’s Vision 2030, entitled “Bottom-Up Economic Transformation Agenda for Inclusive Growth”, reflecting the high priority which state institutions are giving to measures that strengthen, expand and accelerate Kenya’s capacity to export value-added goods within Africa and globally.

Speaking on the signing, the President of the Republic of Kenya, H.E. Dr. William S. Ruto said; “We have a responsibility to steer the country in the right direction, harnessing the immense potential of manufacturing, industrialization, agro-processing, and value addition within Special Economic Zones. The signing of these agreements today marks a significant milestone in Kenya’s development, expanding opportunities to enhance our manufacturing sector and create a more conducive environment for investment. We convene here today to sign an investment – and not a loan – undertaken by people whose faith in this country and its possibilities motivates their decision. This is our country, let’s continue to do whatever it takes to make it an attractive destination for those who want to invest.”

In his own comments, Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said:

“Africa has been heralded as a land of opportunity, blessed with resources that power the world. Yet, we have struggled to translate this wealth into lasting prosperity for our people. For decades, we have watched as others reap the rewards of our natural resources, leaving us tethered to a cycle of dependency—exchanging our riches for aid and loans that kept us on the fringes of the global breadbasket.

“Those days are behind us. Today, Kenya takes a bold step to reshape this story in a profound and impactful manner. These Parks are an integral part of the Government’s plan to boost the country’s economic growth under the Vision 2030 development blueprint.

Today’s signatures are more than ink on paper—they are a promise to the people of Kenya, a pledge that the country will rise as a beacon of industrial might and self-reliance.”

Mrs. Oluranti Doherty, Managing Director of Export Development at Afreximbank, and Captain William K. Ruto, Managing Director of the Kenya Ports Authority, signed the Dongo Kundu Special Economic Zone agreement. Dr. Kenneth Chelule, Chief Executive Officer of the Special Economic Zones Authority, and Mrs. Doherty signed the Naivasha Special Economic Zone agreement, with H.E. Dr. William Ruto, President of the Republic of Kenya, and Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, witnessing the signing of both agreements for the State and for the Bank, respectively.

The Dongo Kundu Industrial Park within the Mombasa SEZ is expected, upon completion, to boost the area with a state-of-the-art industrial park that will contribute significantly to economic growth and industrialisation efforts in Mombasa County and in Kenya as a whole.

The Naivasha II Special Economic Zone – Naivasha II project is located at Mai Mahiu and will include a free trade zone, an industrial park, a logistics zone and a public utility area with a supporting road network. The project will occupy an area of approximately 5000 acres.

The Naivasha II project will also derive value from its strategic geographic position as it sits on the gateway to East and Central Africa through the Northern Corridor Transport System, which comprises both a standard gauge railway and a major highway. Moreover, the SEZ will be close to the Naivasha Inland Container Depot, which serves the East African hinterland countries of Burundi, the Democratic Republic of Congo, Kenya, Rwanda, South Sudan and Uganda.

Other dignitaries in attendance included Mrs Oluranti Doherty, Managing Director, Export Development, Afreximbank; Hon. Davis Chirchir E.G.H, Roads and Transport Cabinet Secretary; Hon. Hassan Ali Joho, Cabinet Secretary for Mining, Blue Economy and Maritime Affairs; Hon. Salim Mvurya, Cabinet Secretary for Youth Affairs, Creative Economy and Sports of Kenya and Honourable Lee Kinyanjui, Cabinet Secretary, Ministry of Investment, Trade and Industry. Additionally, Captain William K. Ruto, Managing Director, Kenya Ports Authority; Dr. Kenneth Chelule, Chief Executive Officer, Special Economic Zones Authority; His Excellency Abdulswamad Shariff Nassir, Governor of Mombasa County; the Honourable Benjamin Tayari, Chairman, Kenya Ports Authority, and Mr. Fredrick Muteti, EBS, Chairperson, Special Economic Zones Authority attended the event.

Distributed by APO Group on behalf of Afreximbank.
About Afreximbank:
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. For 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industralisation and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries effectively participating in the AfCFTA. At the end of December 2023, Afreximbank’s total assets and guarantees stood at over US$37.3 billion, and its shareholder funds amounted to US$6.1 billion. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure (together, “the Group”). The Bank is headquartered in Cairo, Egypt.
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