🔑 Key Features of Microfinance Loans
| Feature | Description |
|---|---|
| Loan Amount | Typically ₹5,000 to ₹2,00,000 |
| Tenure | Usually 6 months to 2 years |
| Collateral | ❌ No security or collateral needed |
| Target Group | Low-income individuals, self-help groups (SHGs), women entrepreneurs |
| Repayment | Weekly, bi-weekly, or monthly in small amounts |
| Purpose | Livelihood, small businesses, farming, education, healthcare, etc. |
| Interest Rate | Varies by lender; capped by RBI for regulated MFIs |
👩🌾 Who Takes Microfinance Loans?
Women running home-based businesses
Farmers needing money for seeds or tools
Street vendors
Tailors, weavers, artisans
Small shop owners
Migrant laborers or gig workers
💼 Common Uses
Buying sewing machines, livestock, or raw materials
Setting up a food stall or kirana store
Paying for school fees or medical expenses
Supporting group businesses (via SHGs or JLGs)
Apply Loan
🧾 Documents Required (Minimal)
Aadhaar card or voter ID
Photo and address proof
Group guarantee (for SHGs or JLGs)
Basic income declaration (verbal or written)
🏦 Top Microfinance Providers in India
| Institution | Type |
|---|---|
| Capital Small Finance Bank | Small Finance Bank |
| SKS Microfinance (Bharat Financial) | NBFC-MFI |
| Spandana Sphoorty | NBFC-MFI |
| Ujjivan Small Finance Bank | Small Finance Bank |
| Bandhan Bank | Started as an MFI |
| Grameen Koota | Rural-focused MFI |
🤝 Lending Models
| Model | Description |
|---|---|
| Self Help Group (SHG) | Group of 10–20 people (mostly women) guarantee each other |
| Joint Liability Group (JLG) | Small group of 4–10 people jointly responsible for repayment |
| Individual Lending | Based on personal income and repayment ability |
✅ Benefits of Microfinance Loans
🧕 Empowers women and rural entrepreneurs
🔁 Builds credit history for future banking access
👥 Encourages community savings and responsibility
📈 Promotes local entrepreneurship and self-employment
💰 Reduces reliance on moneylenders with high interest rates