So what does a loan from Malta Microfinance cost?
Malta Microfinance does not aim to make any profit from its products therefore being able to offer interest free loans repayable over a year with one month grace period (first payment is two months after loan is issued).
Malta Microfinance is owned by St. Andrew's Scots Church in Valletta and it provides its offices for free. All committee members, directors, business mentors, auditors (RSM), tax advisers (KPMG), offer their services free of charge. The support workers is paid by a grant from the Church of Scotland.
Since all loans are interest free, what the client repays exactly what was borrowed. Loans are repayable over a 12 months, for example a loan of €600 would mean monthly repayments of €50 (600/12=50).
Arrangement Fee - 10% (APR 18.6%)
Malta Microfinance is registered with MFSA as a financial institution and pays a yearly fee to be registered. To cover the fee and other running costs, Malta Microfinance charges a one-off arrangement fee of 10% on the loan amount. Clients are asked to pay 10% of the total loan amount during the signing of the loan. For example, if someone borrows a total of €600 they will have to pay €60 for the arrangement fee upon signing of the loan.
We operate on a simple basis. We lend to the first person, who then repays us, then we use the same money to lend to the second person who repays us and so on continuing to lend the same money over and over again to help people. If someone does not repay us then we can not lend to the next person. We rely on relationships of trust with our borrowers and it is essential that all loans repaid.