A loan micro is a small, generally security-free business or finance loan of a short-term provided to individuals for smaller financial requirements.
They are generally low-income group individuals, micro-entrepreneurs, and self-employed professionals who do not have access to financial or lending entities. The major activities are to offer the chance to those people who want to start from the ground level, especially to women and, at the same time, to improve and develop our society and the self-help groups within it.
Microloans have higher interest rates than other types of loans but they are very straightforward and they can help you get a few bucks quickly.
Making microloans the most popular in the sector, private limited companies, Micro Finance Companies (MFIs), and NGOs are the dealers.
Benefits of Micro Loan
Simplicity of the ease of access: Micro Loan services focus on financial inclusion and help the unbanked and underbanked, weaker economic sections. They allow them to get credit immediately and hassle-free. Thus, borrowers from this group are not only able to pay their loans, they also emerge out of poverty and develop self-employment ventures.
Increased loan repayments: Microloans are known for substantially increasing loan repayments mainly through the alleviation of poverty and the financial empowerment of money operations and businesses.
- Age criteria: In most financial institutions, the minimum age limit is 18, which the maximum limit is around 60-65.
- Citizenship: Only Indian citizens are allowed to apply.
- Household income: Applicants’ income from the households should be up to ₹3,00,000.
- Income generation: Applicants should earn through an income generating business/activity.
Understanding Microloans: Small-Scale Financing for Everyone
Think of these microloans as short-term loans for the working/employing themselves, getting started markets, micro-enterprises, small businesses with humble financial needs and hard-pressed individuals. They are special in that they are small loans with the availability of a more flexible and user-friendly service, which allows those who generally have limited access to the traditional financial system to be able to access loans. The policy is not only a governmental one but also the cooperation with the RBI (Reserve Bank of India) has increased the assistance by non-banking and underbanked individuals. In addition to this, NGOs are the micro-lenders in combination with MFIs and private franchises as well.
