Micro Loans

What are micro-loans?

MIcro-loan as the name suggests is the type of loan which is taken for a shorter tenure than other available loans. Micro-loan can be availed by any salaried employee, small business owner, or entrepreneur with a low capital requirement. This type of loan is usually offered to small enterprise owners or families with low incomes whose access to financial or lending institutions is difficult.

Reserve Bank of India along with the government of India has expanded its approach towards the people that cannot have the facility of loans because of their financial situation. The government with the partnership of microfinance companies and private limited companies is providing funds to people. As per the records, NGOs are considered the top lenders of microloans. While microfinance companies are the second largest microloan lenders.

Who avails micro-loans?

Microloans are usually availed by people who are financially unstable and have low chances of approval for loans from banks. People who are running small businesses, or enterprises, unemployed people, sole proprietors, and women entrepreneurs who are in need of fast cash to fulfill their needs.

Purpose of microloans?

The purpose of the micro-loans depends upon the needs of a borrower. It might be for running a small business, expanding a business, personal expenses, etc. These loans are easy to avail of and can be repaid with easy installments and lower interest rates. Usually, the borrowed amount is low and the interest rates are also lower in the case of microloans. If you lack money for your business purpose it is convenient to take micro-loans either from banks, NBFCs, MFI, or NGOs.  

Objective of microloans?

The government of India and RBI approves microloans collectively to fulfill certain objectives. These loans are specially designed to promote the socio-economic development of the weaker section of society or the people who are not linked to any banks or financial institutions. The second objective of such loans is to strengthen the self-help groups (SHGs) and utilize them for the economic development of the company. It also promotes women entrepreneurs, and startups are hence improving the economic situation of the nation.

Microloan providers in India

There are many banks and small financial institutions that deal in microloans and provide loans at fewer interest rates to the borrowers. Here is the list of banks and financial institutions that provide microloans. My Mudra has a strategic partnership with borrowers committing a hassle-free loan to you.

     ● Bandhan Bank

     ● Muthoot Finance

     ● Fullerton

     ● Annapurna small finance

     ● Equitas Small Finance