Usually poor people do not have money to pay their debts and services' charges; therefore, specifically, in developing countries the poor use other means to pay their debts and services charges.
Obviously, we cannot deny the ingeniousness, collaboration and creativeness of the poor in this perspective. They use means of non-cash value such as precious metals, grains, livestock and other goods to meet such difficult situations.
Singapore has no exceptions and the country has deprived of people. Definitely, the government understands these issues, sincerely. Hence, it has been trying to solve money issues of poor people with small scale schemes; however, MicroCredit Business Scheme is a huge step and shows that government is extremely serious to resolve economic misbalance of society.
The loan is decidedly feasible for various businesses. You can use it to support your old business or you can use it to start up a new business as well. Moreover, for your operational needs, purchase of equipment, fitting, furnishing and premises purchase or rent issues this loan will be sufficient. This scheme has a great potential for all the stakeholders. The loan is a great help for the poor.
However, it seems that the documentation process is a bit complex for uneducated and underprivileged people. Therefore, it is assumed that government will take some steps to simplify the process of applications.
The MicroCredit Business Scheme has very flexible terms and conditions. It has been made flexible and easy intentionally because the POSB and Tote Board's official know that only very needy people will apply for the loan. Unquestionably, the needy people are always poor and neglected. Most of them do not know how to get loan from traditional loan companies; moreover, they do not have any securities to deposit in lieu of the loan. Therefore, the officials of Tote Board and POSB (Post Office Savings Bank) designed the criteria, according to the nature of the borrowers.
Thence, they made the following criteria for the borrowers:
• Singapore's citizen only
• Must have less than $30,000 income per annum
• Must be 18 years old
• Maximum duration of the loan repayment 10 years
• Minimum duration of the loan repayment 6 months
• Interest rate 8% to 12%, it will be according to the borrowed
amount and timeframe of repayment schedule
In addition, the government of Singapore has been keen to make the process easy and accessible for the needy people.The government knows that due to the inflation and significant economical changes, the poor are unable to present themselves in the society with self-respect. 31 people have received the loan, since its start. All the businesses are successful except one.