Microfinance loan amounts are typically smaller, ranging from a few thousand rupees to several lakhs, depending on the borrower's needs, repayment capacity, and the lending institution's policies.
● A microfinance loan is a small loan provided by microfinance institutions (MFIs) or specialized financial organizations to low-income individuals, entrepreneurs, and small businesses who lack access to traditional banking services.
● Microfinance loans aim to promote financial inclusion, alleviate poverty, and empower individuals to start or expand microenterprises.
Eligibility criteria for microfinance loans may vary among lenders and MFIs, but common approximate criteria include:
Required documents for microfinance loan applications generally include:
Microfinance loans can be applied for through various channels:
Microfinance loan amounts are typically smaller, ranging from a few thousand rupees to several lakhs, depending on the borrower's needs, repayment capacity, and the lending institution's policies.
Yes, microfinance loans are typically provided without collateral. They are often based on group lending or joint liability, where borrowers within a group provide mutual support and guarantee repayment.
Repayment tenures for microfinance loans usually range from a few months to a few years, depending on the loan amount and the borrower's repayment capacity.
While microfinance loans have been instrumental in empowering women entrepreneurs, they are available to both men and women borrowers who meet the eligibility criteria.
Many microfinance institutions provide financial literacy training, business development support, and mentorship to borrowers to enhance their entrepreneurial skills and improve the chances of loan repayment.