Microloans are a very useful tool for people who have difficulty getting a load from a bank. It is designed for people who are unemployed, entrepreneurs or living in poverty. Normally a bank will not give you a load if you don't have a high paying job or something to your name. The idea is not to give large sums of money to people but rather a small sum, because chances are you will never get the money back if it is a large sum. Most of these individuals don't have many ways to repay their loans because their financial history isn't great. They are also known as novice entrepreneurs because that loan could help them start a successful business. The companies that make these loans are usually non-profit, but they charge a certain amount of interest. This way they can keep the company running and pay the salaries of its employees. They don't do it for money but to help people in need, after all this concept is mostly used in developing countries like Bangladesh. Now the loan is not only limited to developing countries but is also available in developed countries like ours. While a person in a developing country may only need a $500 loan to start a business, a poor individual may need something like $20,000 in the United States to start a business. This is mainly due to the higher cost of living in most developed countries. They not only offer money to start a business, but also provide knowledge and training on how to make the business successful. This is a good idea because without it they would be at greater risk of not getting any returns. Now to be eligible the business must have fewer than 5 employees in total and can only claim an amount under $35,000. No...... middle of paper...... he wants to get money for his education, it will probably be a long time before anyone can get the money back because he is still in school and has to provide for 5 siblings and also 2 parents who don't have work. His ambition to become a dentist, however, is not selfish; he does it to help his community by opening a clinic in the public sector. He needs $5,275 and has only raised 30% of it so far. Your payments are due starting March 2017, which is 111 months from now. This doesn't seem like a loan that someone is worried about getting their money back on, but more of a charity to help someone who really needs it. He has set up an irregular payment schedule, meaning he has no set time when payments will be due each month. Its partner FUNDAPEC charges a minimum interest rate of 13% and has a very low profitability rate. Obviously they are there to help, rather than for money.