On January 18, 2005 is enacted the Law of Programming for Social Cohesion (LPCS), also called Plan Borloo. At the same time, the Social Cohesion Fund (FCS) is set up to “guarantee for social purposes loans to natural or legal persons and loans to unemployed persons or holders of social minima setting up their business” ( ION N ° 2005 -32 of 18 January 2005 – Article 80.III of the LPCS). This fund allows among other things, the guarantee of personal microcredit. The project has an envelope of nearly 80 million euros. Managed by ExtraBuild Depots Consignations, the funds are made available to individuals through banks, duly authorized social actors or banks. Little known and poorly known, personal micro-credit is nevertheless a vector of social integration. A true tool for social integration, personal micro-credit allows the borrower to be valued and empowered by granting him autonomy and the means to achieve what conventional circuits do not allow him. Sometimes called micro social credit, it differs from the gift because it must be repaid and at the same time integrates the borrower into society. Putting into relations three different environments, the praetor (a financial organization), accompanying him (a guide from the associative community) and the applicant / borrower, the microcredit allows to lend to those banks no longer lend.
The personal micro-credit is particularly intended for vulnerable people excluded from the traditional banking system, who have low incomes, social minimums or unemployment and / or who suffer the fragility of their professional situation. Applicants may be over-indebted, and their files will be considered on a case-by-case basis. Personal micro-credit can also be used, under specific conditions, by individuals registered in the personal credit incident file (FICP) or central check file.
Applicants can also sometimes find themselves in a situation that no longer allows them to meet the criteria of access of conventional borrowers, whether in terms of age, or illness. Personal microcredit can also be used by students, apprentices and young workers. Applicants must, however, be accompanied in their efforts by a social or associative actor, benevolent interlocutor of the body granting personal micro-credit that will act as a guide and referent. However, the applicant must have the necessary repayment capacity, the laws and regulations relating to consumer loans applying to personal micro-credit.
The personal microcredit is generally intended for the acquisition of goods or services to improve the situation of the borrower through a personal project to improve the personal situation (economic, social, family …) of the beneficiary. It is different from the professional microcredit that is granted to create or develop a professional activity. It is used in most cases to finance the improvement to mobility (purchase or repair of a vehicle, access to driving license), to facilitate access to housing (work, bail, movable furniture …) to access to vocational training or finance studies, or to finance medical care that would be poorly reimbursed (optical or dental care). Finally, it can be used to cover expenses resulting from an accident of life (divorce, illness, disability, unemployment, etc.).
What does not allow personal microcredit
The personal microcredit does not support the purchase of debts, overdrafts, rent delays or the creation of a company (see in this case microcredit professional).
The amount of personal microcredit may vary depending on the repayment capabilities of the applicant. Generally low, it can vary between 300 € and 5000 €. This amount is the subject of a joint study between the applicant, the praetor and the accompanying person according to the applicant’s project and its relevance. The average amount of loans is around 2300 € (2266 € in 2014).
The repayment period is between six months and four years, but can be extended to five years exceptionally depending on the conditions and according to the case study. The average repayment period is 33 months.
The rate of personal micro-credit is the subject of a dialogue between the borrower and the lending institution, it is between 1.5% and 4% at a fixed rate and more generally the rate of 3.5% is granted . According to the departments, all interest is paid back to the borrower once the microcredit refunded.
Exceptions to these provisions may be granted, but this remains experimental. Each personal micro-credit is the subject of a report, both by the accompanying person and by the praetor, with the aim of carrying out a social study on ways of getting out of precariousness, on the use of funds and on the impact of the device on the societal environment.
In order to reintegrate the borrower into a traditional banking scheme, the reimbursement of personal micro-credit by direct debit from a bank account is preferred. This gives a better visibility on the financial management of the applicant. However, it is not granted reimbursement by granting bank overdraft. If the borrower had trouble with repayment. Personal micro-credit can be subject to early repayment at no cost, and it should be noted that there is no application fee to access it.
In accordance with the regulations in force, the applicant has a right of withdrawal which can be exercised for 14 days following the date of signature of the contract.
The disbursement of funds from the provider is theoretically made between 11 and 17 days after the signature in order to respect the statutory withdrawal period of which the borrower benefits.
First, it is important to distinguish between the applicant / borrower and two spheres. The social sphere and the banking sphere. There are therefore approximately 500 local branches of support networks and more than 20 banking partners.
In most cases marginalized vis-à-vis the banking system, the applicant micro personal credit is not intended to apply directly to a bank. He will contact a social support organization that will act as an intermediary. The role of this accompanist will be to welcome the applicant, to study with him his project and to provide him with the necessary assistance to mount and present the file to the banking organization. True link and accompanying, the role of the contact will be a role of confidence because it will guide with kindness the applicant in his project, from the beginning to the end. If the borrower encounters difficulties in repaying drafts of his personal microcredit, the attendant would then make a point with the borrower to analyze the situation and adapt it for the good of all. Usually a member of associations, this referent allows to have a relevant and objective look at the request of the borrower and also in order to anticipate the difficulties of payment of weakened public and to try to remedy it in a preventive way.
To constitute a personal microcredit file, the applicant must justify a specific project and therefore provide a quote of it, registered, dated and signed. It is necessary to provide an original identity document (passport, national identity card or residence permit); the last three payslips or certificate of entitlement Pôle Emploi or bulletin of pension, invalidity or annuity; the last three statements of all his bank accounts (current accounts, savings books …); his last notice of taxation or non-taxation; the last statement of CAF benefits, if applicable; the last rent receipt or proof of share and, where applicable, the current loan agreements.
Although described as “social”, the microcredit remains subject to the final validation of the banking organizations that support 50% of the guarantee (the remaining 50% are supported by the FCS). The file follows a traditional path in addition to the validation with the social sphere which judges the relevance of the project. The file, if it satisfies the conditions is then brought to the banking organizations which remain decision-makers in the matter. At the end of 2014, nearly 70000 micro personal loans had been allocated since its creation, for a nominal amount of 156 million euros. It is estimated that there are between 10,000 and 14,000 micro personal loans that are funded annually. top