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If you are a business owner belonging to a minority, loans for business are available at concessional interest rates and with longer tenures. This can help ease your repayment and enable you to secure the growth of your business. 


You can apply for a business loan for minorities in India if you are a Sikh, Muslim, Buddhist, Christian, Zoroastrian or Jain as per the MC (National Commission for Minorities) Act, 1992.  Read on to learn more about business loans for minorities.

Business Loan for Minority Interest Rates

The interest rates for these loans will vary depending on numerous factors. Since the rates affect your borrowing costs, being aware of the latest rates is crucial in comparing and choosing the right option. 


Given below is an overview of minority loan interest rates for different schemes: 

Minority Loan Type

Credit Line

Maximum Available Limit (₹)

Interest Rates 

Term Loan

Credit Line-1

₹20 Lakhs

6% p.a.

Credit Line-2

₹30 Lakhs


8% p.a. (2% concession for women applicants)

Virasat Scheme

Credit Line-1

₹10 Lakhs


5% p.a. for men and 4% p.a. for women.

Credit Line-2

₹10 Lakhs

6% p.a. for men and 5% p.a. for women

Micro Finance Loan

Credit Line-1

₹1 Lakh


7% p.a.

Credit Line-2

₹1.5 Lakhs

10% (2% concession for female applicants)

Disclaimer: The rates mentioned above are subject to change. 


Remember, the approval of your loan will depend on numerous factors, including your funding requirements and monthly income.

Types of Minority Business Loans Available in India

There are numerous minority loan schemes to choose from. The funding under these schemes is available through State Channelising Agencies (SCAs). Here is a brief overview of these schemes:

1. Term Loan

This minority loan scheme is available for ventures that are deemed employment and income-generating. You can get a maximum of ₹30 Lakhs under Credit Line 2. On the contrary, if you are a member of a minority group eligible to get Credit Line 1, you can get up to ₹20 Lakhs. 


The interest rate varies for both credit lines as well as for men and women. For Credit Line 1, the interest rate is set at 6% per annum for both men and women. Whereas for Credit Line 2, the interest rate is 8% per annum. 


However, women applicants for Credit Line 2 get a concession of 2%, meaning the interest rate for them is 6%. You can even avail a 6-month moratorium period and a repayment tenure of 5 years.

2. Virasat Scheme

A part of the term minority subsidy loan for business, this scheme offers financing to meet fixed or working capital requirements. This means you can use the finances to purchase tools or machinery to carry out your business operations. 


As a small business loan, the maximum amount you can get under this scheme is ₹10 Lakhs. For men, the interest rate is 5% for Credit Line 1 and 6% for Credit Line 2. Whereas women get a 1% concession for both credit lines. The moratorium period is of 6 months, and repayment tenure of 5 years.

3. Micro-Finance

This scheme is specially curated for the members of Self-Help Groups (SHGs). These are small business loans for minorities in urban slums or remote villages who cannot avail of formal credit. 


Through this scheme, you can avail of funding of up to ₹1 Lakh in Credit Line 1 and ₹1.5 Lakhs in Credit Line 2. The interest rate is 7% and 10%, respectively. Women applicants can get a concession of 2% for financing under Credit Line 2. 


The moratorium period is 3 months, and the repayment period is up to 3 years. 

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Eligibility Requirements for Business Loans for Minorities

If you want a minority loan, apply online or offline after checking your eligibility. Different schemes have different eligibility. However, there are some common criteria. These common requirements include:

  • Applicant should belong to the notified minority community

  • Should not be covered under other government concessional schemes


In some schemes, the preference would be given to individuals belonging to the group for whom the scheme is curated. 


For example, under the Virasat scheme, the preference would be for artisans who participate in the Hunar Haat exhibitions. You can contact your SCA for further details.

FAQs on Business Loans for Minorities

To apply for a business loan for minorities, you can visit the official NMDFC website. Once there, you can navigate to the schemes sections and enter your loan type and your area. This will give you the application form, the documents required, and the SCA information.

Term loans, micro-finance, and virasat are some minority loan schemes you can choose from. All these are curated for different groups of people with different ventures.

People belonging to the notified minority community and having an annual income as per the requirements can apply for these schemes.

These schemes are available through State Channelising Agencies (SCAs), which offer funding in association with the NMDFC.

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