Microcredit: The Single Reason Why You Should Apply for Microfinance

“Microfinance is an idea whose time has come.” – Kofi Annan

Does the title of this article read what you think it says? In other words, are you about to read an article on the pros of taking advantage of a microfinance loan? The simple answer to both these questions is “Yes!”

I know that financial experts advocate strongly against any form of credit and loan-taking by an individual. In fact, we are all strongly advised to live within our means. In other words, we should only spend what we earn and no more. It is apparent from the USA national average debt figures we do not live within our means. According to Suzanne Woolley of Bloomberg.com, the average credit card balances are about $16,000 per family for households with debt, and the total household debt, which includes mortgages is just below $132,500. Therefore, it is apparent that we are doing anything but saving.

Microfinance, microcredit, and car title loans

Before we look at some of the reasons why you should apply for microcredit, let’s have a look at the dictionary definitions of what microfinance and car title loans are:


In a nutshell, microfinance is a “type of banking service that is provided to unemployed or low-income individuals, or groups who otherwise have no other access to financial services.” The ultimate goal of the microfinance industry is give “low-income people an opportunity to become self-sufficient by providing a way to save money, borrow money and get insurance.”


On the other hand, microcredit is a “small financial loan made to poverty-stricken individuals seeking to start their own business. This type of loan typically does not exceed a couple hundred dollars, so an impoverished individual cannot solely depend on this type of loan to fund their business.”

Car Title Loan

In essence, car title loans San Jose fit in the microfinance category in that they target low-income people. Furthermore, this loan also falls under the microcredit category as it is a small loan that is made available to poverty-stricken people. The only caveat here is that should you wish to apply for a car title loan, you need to offer your vehicle as collateral for the loan.

The reason why you should apply for a car title loan

Even though the first part of this article has spoken in-depth about the need to live within your means, there will be times that you need a loan to help you out in the short-term. For example, let’s assume that you are currently unemployed – you were laid off from your job a couple of months ago, and you are battling to find another job. I believe you have two choices: you can either stay at home or start up a microenterprise. For the purpose of this article, we are going to assume that you are going start up your own business. Ergo, the primary reason why you should apply for a car title loan is that you will need start-up capital to purchase your first lot of stock to sell.

For example, if you have decided that you are going to deliver bread to your neighbours every day, you need to buy the first batch of bread so that you can deliver it so that your customers can pay for it. Once you have sold all of your bread, you should have enough to pay back the car title loan as well as purchase the second batch of bread to sell.