Personal microcredit

The Personal Microcredit Charter

The Committee guidance and monitoring the use of funds (Cosef) FCS managed by the Caisse des Depots et Consignations , adopted April 29, 2009 Principles ² following:

• The micro-credit secured personal loan is a bank to an individual without access to the “bank credit” granted by a bank, an association or foundation authorized under the Monetary and Financial Code (Article L. 511-6 5 ° ). The microcredit makes it possible to finance a project of life carried by a person who has a capacity of refunding. The laws and regulations relating to consumer loans apply to this credit.
• The borrower is necessarily accompanied by a social or associative actor, who evaluates the project of the borrower and ensures the smooth running of this project. The decision to grant the loan is the responsibility of the lender. The borrower’s support arrangements must be adapted to each case and determined at the time of granting the loan. If a person benefits from several accompaniments, a single referent must be appointed to accompany the loan, which he then ensures with the various accompanying persons.
• The loan is fixed rate, repayable in monthly installments and non-renewable. The ceilings of duration and amount are determined by Cosef. Exemptions of amount and duration have been granted by Cosef for experiments.
• People in a situation of debt distress may be eligible for guaranteed personal microcredit on the basis of a case-by-case assessment.
• For the granting of personal microcredit, it is preferable to avoid the bail request, unless it contributes substantially to the solvency of the borrower.
• With regard to recovery, automatic debit from a bank account is encouraged because it contributes to better banking. Repayment by granting bank overdraft is excluded.
• In case of payment incident and the first unpaid, the lender contacts the borrower and informs the accompanying person as soon as possible so that he can analyze the situation of the borrower. This analysis may lead, if necessary, to a proposal to adjust the terms of repayment of the loan.
• Except in obvious bad faith, the lender is advised not to apply a late penalty.
• Local authorities are invited to focus their efforts on microcredit on the financing of support.
• Loans and support are the subject of reports to analyze the activity, its development and developments.

Typical credit applicant

This is a natural person ³ in difficulty of access to bank credit. The financial situation of the person is precarious (low income). Age and illness can be aggravating factors.

Main reasons

The reasons for choosing a personal microcredit are as follows ³ :

• Difficult access to traditional financial services: either concerning bank accounts (- 2% of the population) or credit (40% of the French population does not have access to credit).
• Difficulty using financial services. The two types of difficulties concern checks (2 million people are registered in the Central Register of Checks) or credits (2 million people registered in the file of personal credit incidents – FICP).

Institutions that provide personal micro

The banking institutions concerned are ³ :

• Deposit Office.
• Municipal Credit of Paris.
• Crédit Coopératif.
• People’s Bank.
• Caisse d’Epargne.

In addition to these institutions, there are micro – credit solidarity web platforms , such as Babyloan, the pioneering site in France in 2008, which in 2011 became “the first European platform for interpersonal solidarity loans” ⁴ .

Notes and references