Micro loan is a sum of money offered to a borrower, when they require a small amount of money. In most cases this loan does not require a collateral and is often utilised for financing a business.
This loan has been created keeping in mind those who have low incomes, are self-employed or operate a micro enterprise. Since, the funding is limited.
How do micro loans work?
While micro loans offer support to female entrepreneurs, start-ups and self-help groups and provide the funds with minimal paperwork, they have a downside, which is high rates of interest.
Despite having a higher rate of interest, lenders who avail these loans often pay them back successfully and within the specified time frame. Since, this loan is mostly availed by businesses or individuals who have a proper plan and their business does not have high risks.
Benefits of Micro Loan
In India, the weaker sections of society are not offered loans easily, so this is an option which allows them easy access to funds to operate a business or increase their income.
Since, these loans provide micro businesses loans in times of need, they try to pay them off sooner, once they are able to. This improves their performance as well as credit score making them eligible for better loans in the future.
Arthavidhi offers assistance with Micro Loans, so if you are looking to avail this loan sign up today, and benefit from their professionalism and financial expertise.