Frequently Asked Questions

1. What is TMN?
TMN is a second-tier MFI which provides financial and other support services to NGOs for providing microfinance services to their clients.TMN provides bulk credit to partner agencies in its network; it does not provide retail micro finance directly to women groups.

2. What is microfinance? What is its purpose?
Microfinance means providing services to poor families with small loans to help them engage in productive activities or grow their tiny businesses. Microfinance is an amazingly simple approach that has been proven to empower poor people to pull themselves out of poverty. The purpose of micro finance is to provide service to the poor who lack access to traditional formal financial institutions.

3. Who are supported by MF?
The people supported by MF are low-income persons that do not have access to formal financial institutions. Microfinance clients are self-employed people, often household-based entrepreneurs. In rural areas, they are usually small farmers and others who are engaged in small income-generating activities such as food processing and petty trade. In urban areas, they are shopkeepers, service providers, artisans, street vendors, etc.

4. How does it support poor?
Microfinance supports the poor to increase income, build viable businesses, and reduce their vulnerability to external hocks. By providing access to financial services, microfinance plays an important role in the fight against the many aspects of poverty. For instance, income generation from a business helps not only the business activity expand but also contributes to household income.

5. What is MFI? How it is different from money lender?
A microfinance institution is an organization that offers financial services to low income populations. MFIs offer microfinance and only take back small amounts of installment from their borrowers at certain predefined period. Microfinance institutions provide loan on very affordable rate of interest without collateral. It aims to improve the economic condition of poor. While money lender gives loan to any person on very high rate of interest with collateral and money lender concerns only for the profit on his/her money.

6. How MFIs are different from banks?
In the model of MFI clients are not required to provide collateral to receive loans. MFIs are also very client-friendly; most usually MFIs provide the loan to the clients and receive the payment at their door step rather than requiring their clients to come to them. Simultaneously, MFIs support the borrowers in income generating activities.

7. Who can be partner of TMN? What is eligibility to be TMN partner?
TMN makes partner to start up NGOs/FIs who are in form of registered society/ trust/ federation/ section 25-c companies etc. they should also have a base of Self Help Groups (SHG) of women with them.

8. How does TMN select its partner?
NGOs who want partnership with TMN send the application (which can be downloaded from the web site www.trustmicrofinrofin.org.) to TMN on the prescribed format. After receiving the application and information by NGOs/MFIs, TMN makes assessment of the organization through field visit and review of documents.

9. What is the quantum of loan, TMN provides its partners?
Initially TMN provides Rs. 2 Lakhs to 5 Lakhs as first loan to its partner.

10. Whether repeat loans are provided by TMN?
Yes, on the basis of performance of the partner TMN provides repeat loans to the partners

11. What is the rate of interest, TMN charges from its partner?
TMN charges 14% reducing interest on the loan amount.

12. What are the formalities to be observed to get the loan?
At the time of disbursement of loan amount, these documents will be submitted to TMN

• Legal documents (If not submitted previously)
• A letter of request
• Loan Agreement
• Board resolution for taking loan
• Photo ID and Address proof

13. Besides, loan what are the other elements which TMN provides it partners?
TMN provides institutional development support to its partners through training, exposure, hand-holding and other capacity building inputs for field operation, book-keeping, livelihood promotion and documentation.