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Micro Enterprise Loans

Micro Enterprise loans are specifically tailored for income generation purposes, facilitating economic empowerment at the grassroots level. Our credit delivery mechanism involves forming women of low-income households into groups and funding them individually with the group guarantee, thereby ensuring that the loans are backed by social collateral. This approach not only fosters a sense of community responsibility but also mitigates individual risk, enabling aspiring entrepreneurs to access the financial resources they need to thrive and contribute to their local economies.

Our Unsecured group loans are extended to informal groups comprising preferably 6-10 individuals engaged in various economic activities. These groups typically consist of members who are well acquainted with each other and reside in close proximity.

Eligibility for these loans is restricted to women who agree to form groups and provide mutual guarantee for loans taken by fellow group members. Additionally, applicants must own a house; those residing in rented accommodations are not eligible. Furthermore, the applicant must cohabit with their spouse, both of whom must have separate sources of income and be economically active within the age range of 18 to 60 years. Proximity to other group members' residences is also a requirement. Moreover, any existing loans from alternative sources must be in good standing to qualify for consideration.

The primary requirement remains the income proof of all the applicants. This is necessary to assess the loan amount that could be disbursed without risking the company’s position as a lender. The other documents required for a Micro Enterprise loan are the applicant’s Aadhaar Card, Voter's ID card/Ration Card, or MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) Card or PAN Card(if applicable).

The loan tenure spans from 12 months to 24 months, accommodating various repayment periods. The minimum loan amount, referred to as the "ticket size," is set at Rs. 20,000, while the maximum loan size reaches Rs. 1,00,000. Additionally, the loan amount fluctuates in accordance with the loan cycle.

These loans are cashflow based loans and there is no tangible security available. Loan appraisal and loan repayment track plays vital role in determining the cashflows. Household income assessment is done very diligently and credit decisioning has been fully automated. The system has been designed to assess household income based on predefined maximum income generation thresholds corresponding to different types of occupations. Our automated decisioning platform evaluates various parameters such as occupation type, seasonality effects, regional factors, and other peculiar aspects associated with specific occupation which is assessed based on practical insights from the field. Income from rent, animal husbandry, agriculture is also considered.

In case one or more earning members are living outside and sending a fixed amount every month, then that amount is considered as income under Remittance. Pension received from the State and Central Government in cash form is considered as income under pension.

The Branch Manager is responsible for doing the income assessment and he has to do this as part of loan appraisal. BM shall visit each individual client / applicant at her house and collect necessary inputs.

By automating credit rule decisioning, we enhance efficiency, reduce turnaround times, and minimize human error. This not only enables us to make faster and more informed lending decisions but also ensures fairness and consistency in income assessment across all applications. Field staff are trained to make necessary enquiries regarding the income and existing debt of the household.

Keertana has put an upper cap on Loan repayment obligation, which is 50% of the household income. Loan obligation includes principal and interest to be paid by the borrower including the proposed loan. While calculating loan obligation, all active loans of client including collateralized and non-collateralized shall be considered.

If a client has Rs.3 Lakhs annual household income, her maximum repayment obligation in a year including principal and interest shall be Rs.1,50,000- Assuming that all the loans taken have two years average tenor, she is eligible for a Loan of Rs.2,40,000- This Rs.2,40,000- loan will have Rs.1,50,000- loan obligation in a year. However, it is to be noted that Rs.2,40,000 is not the outstanding of active loans the client has, it is the sum of disbursed value of active loans including the proposed loan. For the calculation of repayment obligation, all outstanding loans of both collateralized and non- collateralized loans are taken. In case the applicant/client already has the maximum amount that she is eligible for, proposed loan gets rejected and the client shall wait till some of the existing loans get matured or closed.

Interest rates ranges upto 26% per annum. Interest rates will be fixed on the basis of risk assessment, cost of funds, cost of operations etc.

Our company is committed to maintaining transparency and fairness in its dealings with borrowers. In line with this commitment, we ensure that any changes in terms and conditions, including disbursement schedules, interest rates, service charges, and prepayment charges, are communicated to borrowers in a language they understand. Changes in interest rates and charges are implemented prospectively, meaning they will apply only to future transactions and will not affect existing loan terms. To enforce this practice, a clause regarding communication of changes in terms and conditions is included in all loan agreements, reaffirming our company's commitment to transparent and fair practices.

We cordially invite you to visit our nearest branch for comprehensive information regarding the array of products we offer. Alternatively, you may explore our offerings on our website at https://keertanafin.in for further details.

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