Small businesses in India often find it hard to get loans. And, on top of that, banks frequently demand collateral for these loans. This process becomes quite frustrating for the average small to medium business owners. But, now things seem to be changing for the good.
These days, the business loan interest rate in India is quite reasonable. Adding to that, the Mudra loan launched by Prime Minister Narendra Modi in 2015 os like a blessing. It is designed for all micro-units in the non-agriculture sector. Under this scheme, applicants can get loans of up to Rs.10 Lakhs.
People who are eligible for this loan are:
The banks will categorize their clients in following 3 sectors, and the loan amounts will also depend on these 3 categories:
Sishu. Loan amounts up to Rs. 50,000.
Kishore. Loan amounts of Rs 50,000 to Rs 5 lakh.
Tarun. Loans amounts range between Rs 5 lakh to Rs 10 lakh.
Although these loans can be instrumental for any small business owner, the approval process for these loans are quite slow. This can be quite detrimental to those business owners who need the money fast.
To solve these fintech companies are disbursing short-term loans of 3-12 months. These loans are generally sanctioned within 72 hours. They use Aadhaar and eKYC regulations to achieve this. Plus these fintech business loan interest rates in India are quite reasonable. This entire process is online and seamless.