Microfinance Loan

Microfinance loans are micro credits, typically offered to low-income individuals and groups, generally lacking access to financial services. The loan amount is usually low and typically does not have any end-use restrictions. These are generally offered as financial support to individuals and SHGs to kickstart a new enterprise, self-employed business, and other income-generating activities.

Microfinance loans usually have varied eligibility criteria based on the lender you choose. Along with a good credit score, here are some basic requirements that you need to fulfil to qualify for the loan:

• Your age must be between 18 and 58 years

• You must belong to the low-income group

• Your annual household income should be less than ₹3 Lakhs

• The business you wish to set up or support must be engaged in an income-generating activity
  
  

Also, here are some documents you will have to furnish when applying for a microfinance loan:

• Valid KYC document: Any one of the following

  • Voter ID

  • Aadhaar card

  • MNREGA card

  • Ration card

  • PAN card
    
    

• Proof of income: Any one of the following

  • Form 16

  • ITR filing

  • Family Income Certificate

  • Credit Information Company (CIC) reports

  • Balance sheet
    
    

• Bank account statements

The requirements may vary depending on the lender you choose. So, contact your lender and ask for the complete list of the eligibility criteria and documents required before applying for the loan.

Here are the types of microfinance loan facilities you can avail of:

• Individual Loans:

Individuals can get this microcredit facility for their business and personal requirements

• Group-based Loans:

Banks and MFIs offer these loans to self-help groups (SHG) where members serve as guarantors for each other’s loan requests

• Agricultural Loans:

These loans cater to the needs of small businesses involved in agricultural activities. This includes dairying, livestock rearing, fisheries, etc.

• Micro Enterprise Loan:

These loans are provided for the growth and development of micro-businesses

To get a microfinance loan for your business, follow these simple steps:

• Visit the official website of the lender you wish to get the loan from

• Navigate to the microfinance loan application form

• Provide your personal and business-related details

• Check the details, then submit the loan application

Following this, a representative of your chosen lender will reach out to you to further guide you through the process.

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.