What is Micro loan
Microloans are small-value, short-term loans designed to meet the financial needs of self-employed individuals, startups, micro-enterprises, and small businesses with limited capital requirements. These loans are especially beneficial for low-income groups and micro-entrepreneurs who typically lack access to formal banking or traditional lending channels. To explore your options for financial support, you can check your business loan eligibility before applying.
To bridge this gap, the Reserve Bank of India (RBI), with support from the Government of India, has encouraged initiatives aimed at extending credit to the unbanked and underbanked sections of society. This has been made possible through collaborations with private limited companies and other financial institutions to enhance financial inclusion across the country.
Features and benefits
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Flexible repayments
To repay your loan amount, you can choose from tenure of up to 96 months to repay your loan amount.
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High-value loan amount
Get a high-value loan amount of up to Rs. 80 lakh upon meeting the eligibility to meet all your working capital requirements.
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Loan in account in 24 hours*
Upon filing the application and getting loan approval, you can receive the loan amount in your bank account within 24 hours*.
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Choose a Flexi Loan to lower your EMIs
You can lower your EMIs by up to 45%* on EMIs through the Bajaj Finserv Flexi loan facility. Withdraw money from a pre-set amount and pay interest only on that amount.
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No security
Get easy loans without collateral, meaning you will not have to pledge any asset while availing of a loan from us.
Benefits of micro finance
Some of the benefits of microfinance are:
- It helps start or expand businesses, increase income, and create jobs.
- It empowers women to become more independent, confident, and socially active.
- It improves well-being of the borrowers and their families.
- It fosters financial inclusion and literacy among the marginalised sections of society.
- It contributes to the economic development and poverty reduction of the communities and countries where it operates.
What are the purpose of micro loans
Microloans serve multiple business purposes, including managing working capital, maintaining steady cash flow, launching new ventures, covering routine operational costs, paying employee salaries, and consolidating existing debts. They are often a preferred option for individuals who face challenges in accessing traditional business loans or formal credit facilities.
Eligibility criteria
Getting a micro loan from us is hassle-free and convenient. You just need to meet the following eligibility parameters:
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Citizenship
Indian Resident
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Age
Between 24 years and 80 years*
(*age should be 80 years at the time of loan maturity) -
CIBIL Score
685 or more
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Business vintage
Minimum of 3 years
Documents required:
- KYC documents - Aadhaar/ passport/ voter’s ID
- PAN card
- Proof of business ownership
- Other financial documents
Popular Micro loans providers in India
Here’s a breakdown of some of the most prominent microloan providers across India:
Bandhan Bank
Interest rate: 21.95% p.a.
Loan amount: Minimum Rs.15,000 and maximum Rs.1 lakh
Processing fee: Nil for loans up to Rs.25,000; 1.25% + GST for loans above Rs.25,000
Repayment tenure: 1 year or 2 years
Doorstep facility: Available under the Dedicated Doorstep Service Centre (DSC)
BSS Microfinance
Interest rate: 25% p.a. onwards
Loan amount: Rs.5,000 to Rs.80,000 under the Joint Liability Group (JLG) model
Processing fee: 1% of the sanctioned amount (for loans above Rs.25,000)
Collateral: Not required
Annapurna Microfinance
Interest rate: 23.55% – 23.99% p.a.
Loan amount: Rs.10,000 to Rs.. 1 lakh
Processing fee: 1.5% of the loan amount + GST
Repayment frequency: Weekly, fortnightly, or monthly as per the borrower's preference
Repayment tenure: 12 to 36 months
Insurance: Rs.7.5 lakh coverage per Rs.1,000 per annum
SKS Microfinance – Income Generation Loans (IGL – Aarambh)
Interest rate: 19.75% p.a. onwards
Loan amount: Rs.9,100 to Rs.20,010 for the first loan; next step up to Rs.29,565 based on credit history
Processing fee: 1% of the sanctioned loan amount
Repayment tenure: Up to 50 weeks, with weekly payments of both principal and interest
Equitas Small Finance Bank
Interest rate: 23% p.a. onwards
Loan amount: Rs.2,000 to Rs.35,000
Processing fee: Up to 1% of the loan amount
Eligibility: Offered to Economically Weaker Section (EWS) and Low-Income Group (LIG) borrowers
Ujjivan Small Finance Bank
Interest rate: 22% p.a. onwards (reducing balance)
Loan amount: Rs.5,000 to Rs.1 lakh
Processing fee: 1.2% of the sanctioned loan amount (for loans above Rs.25,000)
Repayment tenure: Options of 6, 12, 18, 24, 30, or 36 months
Interest rate and charges
Microfinance loan comes with nominal interest rates and no hidden charges. To view the list of the fees applicable on this loan, click here.
How to apply micro loan online
To apply for microfinance loan, simply follow these steps:
- Click on the ‘APPLY' button on this page.
- Enter your 10-digit mobile number and OTP.
- Fill in the application form with your basic details, such as your full name, PAN, date of birth, and PIN code.
- Once you enter all your details, please click on ‘PROCEED’ to visit the loan selection page.
- Enter the loan amount that you need. Choose from our three business loan variants – Term, Flexi Term, and Flexi Hybrid.
- Choose the repayment tenure – you can select tenure options of 12 months to 96 months and click on ‘PROCEED’.
- Complete your KYC and submit your business loan application. Before submitting, don’t forget to check your pre-approved business loan offer to expedite the approval process.
Frequently asked questions
A micro loan is a small loan typically provided to individuals or small businesses that have limited or no access to traditional banking services. It is often used in developing regions to support income-generating activities.
An example of a micro loan could be a Rs.50,000 loan granted to a local vendor to expand their stall or to a tailor for purchasing a sewing machine. These loans are small in amount and designed to help kickstart or grow micro enterprises.
Micro loans usually come with a cap, depending on the provider. In India, the limit is often up to Rs.1 lakh, while globally, it can range up to around $13,000. The aim is to meet modest capital needs of small business owners.
Muhammad Yunus is credited as the founder of modern microfinance. He started offering small loans in Bangladesh to support self-employment and later established the Grameen Bank.
SEWA Bank, established in 1974, is considered the first microfinance institution in India. It was launched to serve self-employed women who lacked access to formal banking due to the absence of collateral and fixed incomes.
