How to restructure a microloan in Ukraine?

Microloans have always been popular in Ukraine, because in order to receive them, citizens do not need to stand in a "live" queue or provide a bunch of documents confirming the financial capacity of a person, and therefore the process of obtaining a loan is quite fast. In addition, in connection with the full-scale invasion of Ukraine by the Russian Federation on February 24, 2022, many Ukrainians lost both their housing and their permanent income, which as a result only contributed to the fact that citizens began to take microloans from various financial institutions. In addition, today most citizens of Ukraine continue to live from paycheck to paycheck, which only speaks of the popularity of microloans. That is why the subject of microloan restructuring in MFIs is extremely relevant today. In this article, we will consider how it is possible to restructure microloans in MFIs in Ukraine?

What is a microloan?

A microloan should be understood as a small financial loan issued by an MFI (microfinance organization) to individuals or private entrepreneurs in order to quickly cover their financial needs. It is most often used to solve temporary financial problems.

What are the features of a microloan compared to a regular credit agreement?

1. A small amount of receiving a microloan. A microloan is usually smaller in volume than a regular bank loan;
2. A short term for providing a microloan. In practice, it is usually either a few weeks or up to several months;
3. High interest rate. Due to the risks associated with the fact that microloans are provided quickly and without thorough verification of the person, the interest rate for their provision is much higher than in bank loans;
4. Getting a microloan quickly. Companies that provide such loans usually ask citizens to carry only a passport and RNOCPP with them, without other documents and checking the person's financial solvency;
5. The presence of high fines for each day the microloan is overdue.
6. It is possible to get a microloan not only at the company's office, but also without leaving home, that is, online. For this, a person only needs a personal computer or smartphone, access to the Internet and a bank card, which will be used to transfer credit funds.

What could be the reasons for restructuring a microloan?

The most common reasons in practice for the restructuring of a microloan are: permanent loss of the debtor's ability to work, problems with employment, the occurrence of force majeure circumstances, a sharp decrease in wages, illness or loss of a close relative, and many others, depending on each individual situation.

Does the MFI have a legal obligation to restructure the microloan if the debtor makes such a request?

The regulatory and legal acts of Ukraine indicate that the MFI has the right to restructure your microloan, but not the obligation, that is, to decide at its own discretion whether to carry out such a process or not. However, in most cases, in order not to waste extra time and money on lawyers from going to court, MFIs still resort to microloan restructuring, as it is beneficial to both the debtor and the creditor.

If you have taken a microloan from an MFI in Ukraine, but want to restructure such a debt, then in this case you cannot do without consultation from experienced lawyers - the "Prikhodko and Partners" law firm.

Our team understands the solution of such issues, as we monitor the latest changes in the field of financial and banking law, which makes it possible to provide qualified assistance in restructuring the client's debts. We are always looking for the best possible solution for each situation. So don't delay and apply!