Microloans have emerged as a powerful financial tool to uplift low-income individuals, small entrepreneurs, and rural communities. These loans enable people without formal credit history to access small amounts of capital.

Microloans are small-ticket loans ranging from ₹1,000 to ₹1,00,000, designed for those without access to traditional banking services.

Who Can Benefit?

• Small shop owners
• Street vendors
• Farmers and artisans
• Women-led Self Help Groups (SHGs)
• Low-income urban households

Providers of Microloans

• Microfinance Institutions (MFIs)
• NBFCs
• Government-supported SHGs
• Fintech companies with alternate credit scoring

Advantages

• Minimal documentation
• Flexible repayment options
• Doorstep services in rural areas
• Promotes women empowerment and entrepreneurship

Challenges

• Higher interest rates (18–28%)
• Over-indebtedness risk if not monitored
• Limited loan size

Microloans are essential in bridging the credit gap in rural and semi-urban India. They promote economic growth at the grassroots level.

💡 Rupi247 Tip
Our digital lending model uses mobile and alternative data to offer responsible microloans, even to those without a CIBIL score.