Microfinance Loan

• Income Generation Loans: Income generation loans are typically given to joint liability groups, and provide them with the capital to start or grow their small businesses or micro enterprises.

• Mid-Term Loans: Mid term loans are made accessible after 25 weeks of repaying the income generation loan. Furthermore, an individual is eligible for a mid-term loan if they do not take the maximum amount of the income generation loan, as the remaining amount is usually disbursed as the mid-term loan.

• Emergency Loans: Emergency loans are interest-free, and are available to the individuals throughout the year. Emergency loan amount is typically lesser than income generation loan amount, and the repayment terms differ from one borrower to the other, and is agreed upon by the MFI and the borrower. These loans are disbursed to meet expenses such as hospital admissions and treatments, funerals etc.

• Individual Loans: Individual loans are given to clients whose needs are specific, and require collateral and a guarantor. These loans are provided outside of the group lending process, and the loan amount is usually higher than that of income generating loans. Furthermore, a rigorous assessment of the individual’s business and the cash flow is conducted before the disbursement of individual loans.

• Education Loans: Education loans are provided to clients to ensure that the educational requirements of their children are met.

• Consumer Product Loans: Consumer product loans are provided to individuals to improve their quality of lives, by offering them access to products such as cook stoves, mobile phones and solar lights or lanterns.

• Dairy Cattle Loans: Dairy cattle loans enable individuals to purchase new cattle, or improve dairy farming activities, thereby increasing their income level.

• Agriculture Loans: Agriculture loans help farmers and other individuals in purchasing seeds, fertilizers, livestock and other equipment, thus improving the crop quality and yield.

• Filled and updated application form

• PAN card, passport copy, ration card

• Proof of office address

• Passport-size photographs of the applicants and co-applicants

• Certified copies of MOA/Partnership deed/AOA

• Repayment history

• Audited financials of the last two years

• ITR of partners and/or directors for the previous two years

• Bank account statements for the previous six months

• Proforma invoice for the equipment that is being financed

• Professional qualification certificates for CAs, lawyers, architects and doctors

The microfinance industry has witnessed promising growth over the past year, on the back of the burgeoning Indian economy. The microfinance sector has been crucial in improving the overall GDP of the country by offering loans to marginalized low-income households, along with micro, small and medium enterprises (MSMEs). The sector continues to play a pivotal role in driving the growth of the unbanked and underbanked population and is expected to maintain the upward growth trajectory soon.