_ Frequantly Asked Questions

Frequantly Asked Questions

  • What is Microcredit?
    • Microcredit is a small capital that facilitates financially challenged women to participate in  income generating activities.
  • What is the purpose of Microcredit?
    • The purpose of microcredit is to facilitate those who are unable to obtain loans from the banks and support them in the participation of income generating activities. It is aimed to meet the capital requirements by contributing to the economic and the social development.
  • When was Microcredit launched in Turkey and in which provinces is it being implemented ?
    • Microcredit was launched in Turkey on 18th July, 2003, when the member of the parliament in the 22nd term, Prof. Dr. Aziz Akgül who is the Chairman of the Turkish Foundation for Waste Reduction (TİSVA) distributed 500 TRY cash cheques each to 6 women in  Diyarbakır with a total amount of 3000 TRY. Microcredit is being implemented by 95 branches  in  64 provinces of Turkey. Our goal is to spread the microcredit application in 81 provinces of Turkey.
  • Why Microcredit?
    • Microcredit is a source of capital for financially challenged women who want to start their own businesses but do not have enough finances to do so. 
  • Who is given Microcredit?
    • * Women who have the desire to work, have the dream to initiate their own businesses and who abide by the basic principles of microcredit can benefit from the capital support system offered by the microcredit system which provides a maximum of 1000 TRY yearly.

      *  As a result of income-generating activities, financially challenged women can achieve a healthy lifestyle and provide quality education to their children which eventually gives them an opportunity to improve their living standards. 

      * The basic aim of microcredit is to alleviate poverty and its target group are financially challenged women. Only women are eligible to receive microcredit but men can also benefit by working together with micro-entrepreneurs in production activities. 

      *  Microcredit is granted individually to micro-entrepreneurs but the capital can also be utilized within a group. There are five members in a microcredit group.However, no one can use someone else's credit for their needs.
  • What are the features of Microcredit?
    • * Microcredit is a support provided to financially challenged individuals so that they can earn income by initating their own businesses.

      * Microcredit does not require any sort of collateral and  execution proceedings are not followed. Trust and belief in each other is an essential component of microcredit. 

      * The support is given in the sort of credit and repayments are collected in the form of weekly installments along with the service fee. 

      * In the first year, micro-entrepreneurs are required to make timely repayments, attend meetings in a disciplined manner and then the credit is increased in the second year.

      * We believe that credit is a basic human right.

      * You and your closed ones can come to the specific branch to apply for microcredit or employees of microcredit can come to your home and inform you about the system of microcredit.
  • Why is the word Grameen used?
    • In Bangladesh, the word Grameen means rural. It is the name of a bank which was founded in Bangladesh by the Nobel Peace Prize Laureate, Prof. Dr. Muhammad Yunus in the year 1976 with the purpose to tranform financially challenged people to entrepreneurs. Today, TGMP is the bank of financially challenged women so the word Grameen is used. 
  • What is the relationship of TGMP with Grameen?
    • The Turkish Grameen Microfinance Program (TGMP) is a non-profit microfinance organization which was established as a joint venture between the Turkish Foundation for Waste Reduction (TISVA) and Grameen Trust. Grameen Trust provides financial services to women who are living in poverty and TGMP receives support from Grameen Trust because it is the first organization in Turkey which is offering the same purpose. Therefore, TGMP has been given permission to use the word “Grameen”. 
  • Why does the Grameen Trust allow to use their name?
    • On 11th June, 2003, Turkish Grameen Microfinance Program (TGMP) was started with the support from the Nobel Peace Prize Laureate and the world leader of microcredit Prof. Dr. Muhammed Yunus. Therefore, the relationship with the Grameen Trust was initiated to help the financially challenged women of Turkey.
  • Why is Microcredit only given to women?
    • Microcredit is provided to women only because they are adversely affected by poverty in the family and the society so microcredit provides support to them. However, men can also benefit from microcredit. For instance, mothers, wives, sisters and aunts of men can receive microcredit. Only a woman can receive microcredit but a man can also benefit from the microcredit received by the woman.
  • What is the purpose of Microcredit ?
    • Microcredit is a system that does not require any capital and it supports financially challenged women to start their own businesses.
  • How is the Microcredit application implemented?
    • Women who want to use microcredit creates a group of 5 women each. The group is based on trust and past relationships with other women. The group receives training of almost 1 hour daily for 3 days and learns about the features and conditions of microcredit. Afterwards, the group becomes eligible to receive the microcredit. 
  • What is the use of Microcredit?
    • The women who receive microcredit initiate to provide sustenance for their families. They contribute in earning income for their families and support their children in receiving better education.
  • How is money given in Microcredit?
    • Microcredit is a system which does not require collateral and it is given individually to 5 micro-entrepreneurs in a  group who live in the same neighborhood and have same economic and social conditions.
  • What is the duration and repayment of the Microcredit?
    • Microcredit is given for 1 year and the repayment of the loan is completed in 46 weekly installments.
  • How is the money repaid in the Microcredit system?
    • The loan received from TGMP must be utilized within a week for some income generating activity. After one week, the weekly amortization of the loan is initiated for the next 46 weeks along with the service fee of the loan. The employee of microcredit goes to the specific neighborhood or village to collect the installments of microcredit.
  • What is the initial credit in the Microcredit system?
    • In the microcredit system, an initial credit is given from the range of 100 TRY - 1.000 TRY. After that year, with reference to the accumulation of capital and success of the business the limit of the microcredit is increased. Those who show outstanding success are given the 'Entrepreneurial Loan' 
  • What is the criteria for increase of credit limit in Microcredit?
    • The criteria for increase of credit limit is based on the performance, discipline and purpose of the credit used by the micro-entrepreneur.
  • How many types of loan does Microcredit offer?
    • Basic Loan: The initial loan size for financially challenged women in the first year range from 100-1.000 TRY.

      Entrepreneurial Loan : Micro-entrepreneurs who have received the basic loan and proved its business potential are eligible for an increase in the credit limit amounting to 1.000 TRY. 

      Animal Husbandry Loan: This loan is designed for micro-entrepreneurs who are interested in animal breeding are given a loan up to 2.000 TRY and the repayment is completed within 26 weeks.  
      Social Development Loan: In addition to the microcredit, micro-entrepreneurs can also sell 15 different kinds of products from the following two industries (cleaning, cosmetics) in order to generate additional revenue. Loan repayment is made within 46 weeks.

      Communication Loan : In addition to the microcredit received by the micro-entrepreneurs, this kind of loan is aimed at providing technological development. Through this loan, micro-entrepreneurs can buy smart phones from TGMP for their own use or to sell to people. Loan repayments is made within 46 weeks.   
  • Is there any guarantee required for Microcredit?
    • Microcredit does not require any sort of collateral and court proceedings are not followed if loan is not repaid. Trust and belief in each other is an essential component of microcredit.
  • What is the repayment rate of Microcredit?
    • Even though the microcredit system in Turkey does not require any sort of collateral and court proceedings are not done for defaultors, our repayment rate is 100%.
  • What is the cost of Microcredit? Is there any interest charged?
    • Microcredit charges a service fee in order to ensure its sustainability and to provide services to as many people as possible. Interest is never charged from the financially challenged people. TGMP is a non-profit organization and its goal is sustainability so it just charges a service fee in order to finance its relevant expenses. The installments of repayments are collected according to the financial status of the micro-entrepreneurs. Employees of TGMP are forbidden to even drink water in the houses of micro-entrepreneurs
  • Is Microcredit a commercial bank loan?
    • It is impossible for financially challenged people to receive loans from the banks as they do not have any collateral. However, financially challenged people have the right to improve their living standards. TGMP is a source of capital for financially challenged women so that they can participate in economic activities.
  • What is the difference between Microcredit and a commercial bank?
    • Commercial banks require mortgage and guarantee from the person who apply for credit. However, microcredit does not require any mortgage or guarantee. In the microcredit system, employees of TGMP go weekly to the neighborhood or village of the micro-entrepreneurs to collect the installments. However, customers of commercial banks are always required to go to the bank.
  • From where and how can information related to Microcredit be acquired? Where can people apply for Microcredit?
    • You can come to the specific branch to apply for microcredit or employees of microcredit carry out field work activities so they can come to your home and inform you about the system of microcredit.
  • In what areas is Microcredit used?
    • Microcredit system is being applied in Turkey under the leadership of Turkish Foundation for Waste Reduction (TİSVA) and collaborations with provincial governorships. People cannot overcome poverty and hunger merely from donations. They need to work with honor and earn their livelihood and TGMP provides this opportunity to them.
  • What is a center in Microcredit? What is the purpose of creating a center?
    • Center: Microcredit is carried out from the creation of groups. Center is the place where the employees of microcredit can meet the micro-entrepreneurs in the groups. A center is created from 4 to 6 groups. When a new center is created, it is aimed to act together and cooperate with the financially challenged women.
  • How is the group leader selected? What are the duties and responsibilities of the group leader?
    • The group leader or group president is selected by the micro-entrepreneurs in that specific group. There should be a group leader in every group. It is important that there should be a group president and deputy group president in every group of the center. Group leader and deputy group leader are selected in the month of April every year and they start their duties on the first day of the month of May. 

      The group leader is responsible for the attendance of the micro-entrepreneurs, payment of installments and maintenance of discipline. Group leader should help the Center Manager to collect the installments and savings and also inform the micro-entrepreneurs about the rules of the projects.  

       If the group leader does not attend half or more than half of the meetings in a period of 3 months then she is removed from her position and a  new group leader is selected in her place. If the group leader creates any problems in the center then she will be removed from her position and a new group leader will be selected. 
  • What is a group in Microcredit? What is the function of a group in TGMP?
    • Group: It is a small group with women who have the same economic status, opinions and place of residence but are not related to each other. A group consists of 5 micro-entrepreneurs. A group is the smallest unit at TGMP but it is the basis of trust in TGMP. If there is any problem within a group, then the micro-entrepreneurs within that group try to solve that problem. 
  • Is individual credit used in Microcredit?
    • Microcredit is a system that is based on group consciousness. It is aimed on development of solidarity and improvement of relations with neighbors. There is no collateral required in the system of Microcredit. As the system is based on mutual trust so individual credit is not used in Microcredit.
  • What are the conditions of seperation from Microcredit?
    • If the loan of the micro-entrepreneur has been repaid then the micro-entrepreneur can leave the microcredit system.
  • What are the conditions and scope of Microinsurance and Micro-housing insurance?
    • Microinsurance:  Death as a result of accident or permanent disability provides a payment of 10.000 TRY. The individual accident insurance can be made by a yearly payment of 12 TRY by the micro-entrepreneurs. 

      Micro-housing insurance: As a result of fire, flood, storm or other natural disasters a payment of 15.000 TRY is given to house owners and a payment of 10.000 TRY is given to tenants. This insurance can be availed by a yearly payment of 14 TRY.
  • Is it compulsory to have Microinsurance and Micro-housing insurance?
    • Micro-insurance is aimed to provide insurance to the micro-entrepreneurs for accidents that are imminent in life. Therefore, it is mandatory for the micro-entrepreneurs. If the micro-entrepreneurs already have housing insurance then Micro-housing insurance is not compulsory.
  • What happens to the loan in the event of death?
    • In the event of death as a result of accident then Microinsurance makes the remaining payment of the loan. In the case of natural death, close relatives of the micro-entrepreneurs make the required payments. According to the Decision Number 17 on 17th August 2011, TİSVA Board of Trustees have decided that if the close relatives cannot make the payment of the remaining microcredit then the loan will be closed without payment.