External Sources of Credit
You can consider the following sources of money:
1.Pawnshops - You can get quick cash by pawning jewelry and other valuables.
2. Credit cooperatives - These are a popular and easy source of credit especially in the rural areas. It may therefore be very useful for you, as entrepreneur, to join one. Usually a credit coop will lend an amount up to five times bigger than the money a member has deposited in it. Interest charges are often minimal.
3. Money lenders - These are people who lend quick money without collateral but charge exorbitant interest rates. They are otherwise known as “five-six” operators, because they usually charge about a peso interest per month for every five pesos they lend.
4. Lending investors - These are business enterprises engaged in money-lending operations. Considered a cross between money lenders and banks, lending investors extend short-term loans quickly to individuals and businesses with or without collateral. Interest rates are higher than bank rates but lower than those charged by money lenders – usually ranging from 3 to 5 per cent a month. Lending investors have proliferated all over the country and have become an important source of credit to small enterprises.
5. Formal sources of credit - These include banks, financial institutions and certain government development agencies and development-oriented non-government organizations. They are called formal sources of credit because they have the legal authority or mandate to lend money to individuals and businesses.
External Source of Credit
1.Pawnshops - You can get quick cash by pawning jewelry and other valuables.
2. Credit cooperatives - These are a popular and easy source of credit especially in the rural areas. It may therefore be very useful for you, as entrepreneur, to join one. Usually a credit coop will lend an amount up to five times bigger than the money a member has deposited in it. Interest charges are often minimal.
3. Money lenders - These are people who lend quick money without collateral but charge exorbitant interest rates. They are otherwise known as “five-six” operators, because they usually charge about a peso interest per month for every five pesos they lend.
4. Lending investors - These are business enterprises engaged in money-lending operations. Considered a cross between money lenders and banks, lending investors extend short-term loans quickly to individuals and businesses with or without collateral. Interest rates are higher than bank rates but lower than those charged by money lenders – usually ranging from 3 to 5 per cent a month. Lending investors have proliferated all over the country and have become an important source of credit to small enterprises.
5. Formal sources of credit - These include banks, financial institutions and certain government development agencies and development-oriented non-government organizations. They are called formal sources of credit because they have the legal authority or mandate to lend money to individuals and businesses.
External Source of Credit
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