Guide to Micro Loans

Jan 9, 2023

3 min. Read

Guide to Micro LoansMicro Loan

If you are a passionate individual with big dreams but no one on your side, micro finance loan guide is all you need. Micro finance loan is something meant especially for you. Microfinance is a financial tool that helps unemployed and low-income individuals procure funds and make a wonderful life for themselves. Since India is a developing country, the microfinance market has recently seen continuous and rapid growth. As a result, people have begun to realize that this tool does what it promises.

It provides financial services to people who have nowhere else to go. Along with offering a micro finance loan, the other microfinance services available as a low-income for an unemployed individual are micro savings and micro insurance. Moreover, you can borrow your small business loans through micro finance services and start that business you've always dreamed of. As a result, the microfinance industry has seen an astounding growth of 13% in the last quarter. This industry disbursed a total loan of Rs. 85 667 crores in the final quarter. An added advantage of a micro finance loan is that it is collateral-free, which makes it more popular than any other financial tool.

Micro Finance Loan Application
A micro finance loan's primary goal is to provide funds to the underprivileged easily. Therefore, micro finance loan companies have made the micro finance loan application process very simple. Moreover, it can be applied online. Follow these steps for a micro finance loan application:

• Research: Research is the first and foremost step when you are about to obtain funds through micro finance loan. Understanding the micro finance loan market and finding out the best offer for you is what you need to do before you even decide to apply. Conduct thorough research and learn everything you can about a micro finance loan.

• Selecting the channel: Narrow down to the channel you would want to obtain micro finance loan from. The first one is the SHG Bank linkage program. This channel encourages financially needy women to come together in a group of 10 - 15 and contribute savings to the group at regular intervals. Loans are provided through these contributions. SHGs can also obtain bank loans for income-generating activities. The second channel is micro finance institutions which lend funds through a joint liability group. It is an informal group of 5 to 10 members who seek loans jointly or individually.

• Online application: if you selected your channel for micro finance loan through LTFS, all you will have to do is visit the website and submit the inquiry form. The team will then get in touch with you and help you proceed.

What Are Micro Finance Loans And Other Types Of Micro Finance
A micro finance loan is a loan that low-income people can obtain without collateral. Here are other micro finance tools you should know about:

• Micro savings: Small business owners can open a savings account with no minimum balance. It will enable entrepreneurs to save small amounts of money from getting financial security over time.

• Micro insurance: This insurance cover is offered to micro finance loan borrowers. The unique feature of micro insurance is lower premiums as compared to regular insurance policies.

Micro Finance Loan Documents Required
Documents for microfinance loan application are identification proof such as an Aadhar card or voter's ID. You can even provide a ration card or MGNREGA card. As for income proof, LTFS considers your income-generating capacity while accepting your application for a micro finance loan. With a limited number of documents and a simple application process, you can obtain a micro finance loan from LTFS in no time.

Micro finance loan has proven to be one of those indispensable tools that a country like India can never do away with. Micro finance loan offers funds to people who haven't received many privileges on their plates from the universe. It has a moral purpose of allowing poor yet tremendously talented people to rise above all adversity and create a wonderful life for themselves. It has helped them realize their potential and role in the entire scheme of things. It has allowed the common and underprivileged Indians to understand their power and talent. If you have been thinking that nobody would give you funds because you have no income, then it is your time to choose this friend. After knowing about microfinance loan meaning, nothing should stop you from applying for a micro finance loan today at LTFS.

Key Features Of Micro Finance Loan
To fully understand Microfinance Loan Meaning, let's look at its features:

• Caters to low-income: A micro finance loan was brought into the market, keeping in mind the low-income group. Naturally, they are non-discriminatory and can be obtained by people with no income or meager income. in India, majorly micro loan borrowers are people with a low-income background, and therefore micro loans are extremely popular in our country.

• Small amounts available: Using a micro finance loan, you can borrow small amounts of money and have the option of borrowing only as much as you need. At LTFS, the micro finance loan size is 35,000 to 110,000.

• Short loan tenure: The duration you pay back a micro loan is also short compared to other loans. This allows you to clear your debt sooner. At LTFS, we provide a comfortable loan tenure from 24 months to 36 months.

• No collateral: At LTFS, we understand that individuals with low-income backgrounds and poor financial status cannot afford to offer security, and therefore the micro finance loan is collateral free. You need no collateral to get funds through a micro finance loan.

Apart from this, the micro finance loan interest rate offered at LTFS is a competitive 24%, yet another reason for you to apply now.

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