Michu Digital Lending Platform

What is Michu?

Michu is a credit score based digital lending platform for micro, small and medium enterprises. The platform assesses the risk and growth potential of MSME’s so that lenders can make a risk-based decision whether to offer loan. Michu will enable Coopbank to address many of the perceived challenges and actual challenges of lending to Micro, Small and Medium Enterprises in Ethiopia.

Why Michu ?
Financial institutions in Ethiopia do not have a relevant, appropriate, scalable, and digitized means of assessing the credit worthiness of MSMEs without some sort of guarantee. Micro, small, and medium enterprises (MSMEs) do not have sufficient collateral assets to unlock credit from banks. This is mainly attributed to lack of collateral, lack of appropriate technology, and difficulty connecting to the digital economy.

Michu enables Coopbank to fulfill financial needs of MSMEs without any form of collateral, customers can boost efficiency and do more with less by reducing “The time to yes” from weeks to minutes.

Speedy Loan Analysis

Several pieces of data are consumed to appraise and process customer loan requests. However, for Michu, several digital data sources are used to inform credit decisions. These variables are assembled into computerized decision trees and substitute manual decision-making processes.

Features of Michu

Ease of Application Process

Coopbank can make better quality lending decisions more quickly and consistently by introducing standard processes and accurate data. Michu removes geographical barriers as well as the need for physical movement. A borrower can initiate a loan application from any location and at any time. Once the borrower fills out the form and uploads the required documents, the platform will quickly communicate the loan decision.



Short Loan Processing Period

This is another major differentiating factor between conventional lending and the Michu Loan. It could take weeks, sometimes even months, to process applications and disburse the required funds if the regular loan processing methods are followed in the current banking system in the country. On the other hand, digital lenders can process your application within a few minutes and the funds can reach your bank account within a second. This is highly ideal, especially when you want a quick loan to supplement your financial needs.

Availability of Low Amount of Loans

The financial dynamics of Michu loans are fundamentally different from conventional loan products in that loan sizes are generally small and loan terms are short.


Remote Customer Relations Management

Because most transactions occur through digital channels, in-person interactions between borrowers and lenders are limited in digital credit delivery. Customers are managed remotely, with digital follow-up and collection. The digital nature of lending addresses traditional credit products' geographic access barriers and increases financial inclusion.


Credit Score Based Decision

Michu Loan decisions are based on the credit score of the customer. The loan amount, loan duration, and interest rate are determined by the credit score of the applicant. The higher the credit score of the customer, the higher the loan limit, the higher the loan duration, and the smaller the interest rate would be.

Collateral Free Loan

Michu loan does not require any form of collateral. Unlike the conventional lending system, the credit worthiness of the MSME is solely decided.

Michu Business Loan

Michu business loan is targeted towards MSMEs that are operational and in need of finance to supplement their business. This product is currently operational, and you can visit nearby Coopbank branches to get the product.

Key Aspects of Michu Business Loan

  • Loan Limit Ranges from ETB 5,000-50,000
  • Loan Duration is from 1 month to 12 months
  • Interest Ranges from 2%-2.5% on monthly basis
  • Facility Fee of 2% of is calculated on approved loan amount.

MSMEs- Group owned

  • Smart Android Phone
  • Coopbank Account
  • Renewed Trade License
  • TIN in the name of company and one of the group members
  • Renewed ID Card of the Manager
  • Article of Association and Memorandum of Association

Michu Consumer Loan

Michu consumer loan is targeted towards employee of various governmental and nongovernmental organizations. To mitigate financial needs of employees in their day-to-day lives Michu Consumer loan is an ideal product. Once its finalized, the loan products can easily accessed through smart phones from the comfort of your office/home. It will also enable customers to get quick access to loans for emergency, and other personal consumptions.

Loan Application Process

The following steps will guide you through the application process for Michu Loans:

Get the App

Visit your nearest Cooperative Bank of Oromia branch in order to start the process.

Loan Request

Once you have registered on the app, you will be able to request a loan

Approval Message

Once a loan request has been approved by the concerned authority, it will be notified.

Register for Loan

Register your company and personal information after downloading the App

Request Approval

The concerned body will check and approve your loan request once you send it

Payment Collection

The last step is to collect the money from any Coopbank branch or via mobile banking.