Micro lending business is a very powerful lucrative business if you know the technics and tricks that are actually involve. Due to the economic situation of some countries some people has seen microfinance as the last resort for the survivor of their business. Some petty traders cannot approach the commercial banks for loan because of the strict terms and conditions attach with these commercial banks. These petty traders have no choice than to secure a loan from this microfinance in other to invest in their business. The demand of the services of these microfinance has made microfinance business a very profitable business. Currently micro lending business has become very popular because of the current economic situation of some countries. A lot of entrepreneurs that has the capital are really venturing into the business. But some of these entrepreneurs are really facing some challenges in the business. One of the major challenges they are facing is on the area of default. Some of their clients they lend money to are really defaulting. The reason why some of there client are defaulting is because they did not take some certain things into consideration before disbursing money to the client. Let’s us now look at the things you need to take into consideration before disbursing fund to your clients.
The following are what you really need to take into consideration before you disbursed fund to your clients:
1. Personality: you have to consider the personality of the client
2. Guarantor: The client you are disbursing the fund to must have a qualify guarantor. Make sure that the guarantor is financial buoyant more than the client you are disbursing the fund to.
3. Collateral: The client you are disbursing the fund to must have a collateral that is even worth twice the fund is borrowing.
4. Character: you also have to consider the character of the client before you disbursed the fund. Study the character of the client very well before disbursing the fund.
5. Capacity: This area is very important. Consider the capacity of the client before disbursing the fund. Don’t disbursed fund to a client who don’t have the capacity to pay back
These are the major 5 things you need to consider before disbursing funds to the client. If you can apply these 5 things the chance of your client defaulting is very slim.
Let’s now look at what you really need before you can venture into the business. The following are the major things you need for you to kick start the micro lending business:
1. Capital: capital is the life blood of the business. For you to start a micro lending business you need capital. You can secure a loan from a commercial bank or from private investors.

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