Apr 29, 2018

Micro Loans in India

Stay Alert Series - 12

Micro Loans in India

In simple words Micro Loans are smaller amount loans intended to support small business entities to growth and expand. Micro loans have contributed in growth of small entrepreneurs with respect to start ups as well as expansion of business.

Characteristics of Micro loans

  • Most of the loan applicants are from low income group.
  • These are usually short term loans.
  • Term Micro is used small amounts of loans.
  • The frequency of repayment of loan is generally high.
  • Micro loans are offered without collateral/Security.
  • The purpose of these loans are to generate income.

Is it fair to consider Micro loan for my Small Business?

Micro loans offers generally supports to week credit history businesses. It is also essential to analyse your credit position in market and basis that can consider your requirement. It is also important to approach your own bank instead of going to other banks for loan requirement. Micro Finance lenders look at your credit worthiness but they are more concerned with long term stability of your business. Though amount of loan is comparatively small/low, still the lenders are concerned on pay back options.


Anything valuable comes with a price. Even micro loans have their drawbacks and these should be considered too before getting a loan. One of main demerit of micro loans is that they carry a higher rate of interest than any other type of loans. Hence, you should carefully analyse every aspect before stepping further.

Stay Alert and Stay Safe.

No comments:

Post a Comment