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MSME Loans

MSME loans are unsecured loans provided to individuals or business for meeting any personal or business financial need/purposes. The term MSME stands for Micro, Small, and Medium Enterprise Loans. These loans cater to a variety of individuals and businesses, including:

  • Self-employed individuals (e.g., small traders, vegetable vendors, tiffin center owners, bakeries, cement and hardware shop owners, brick-making unit owners, etc.)
  • Weekly wage laborers (unskilled laborers) such as agricultural laborers, domestic help, Tea stall workers, and other food joint workers.
  • Skilled laborers including carpenters, masons, electricians, painters, plumbers, mechanics, tailors, and more.
  • Small-scale farmers.
  • Individuals engaged in any skilled trade (e.g., tailoring) or work requiring expertise.
  • Salaried employees, including Class IV government employees (e.g., Anganwadi teachers, Anganwadi workers, drivers, municipal workers, elementary and high school teachers, attendants, clerks).
  • Private sector employees (working in private companies).
  • Workers in factories (garment factories, jewelry-making factories, fishery factories, poultry farms, etc.)

MSME loans are versatile, covering needs for both business and personal expenses. For businesses, loans can aid in expansion, managing working capital, buying assets, or even starting new ventures. Personal uses include home renovation, buying property or live stock, cattle farming repaying high-interest loans, or covering education, medical, or wedding expenses. The borrower must clearly state the purpose of the loan and have a solid plan for repayment, considering the potential risks involved, especially for new businesses.

Loans shall not be used for any speculative, illegal, or unlawful purposes that violate the laws of the country.

  • Individuals aged between 18 and 58 years, both men and women, are eligible for this loan. Loans can only be granted to women up to a certain age, with exceptional cases considered for men.
  • Only individuals who own their own homes, shops, or any commercial property are eligible for these loans. Those residing in rented accommodations are not eligible. If they purchase a property in another region, it becomes challenging to trace them, making owning property in the same area a crucial criterion. If they have their own shop and house, they are also eligible for the loan. To be eligible for the loan, one must possess some form of stable asset.
  • For every loan, both the applicant and co-applicant must engage in some form of economic activity to generate income. If the applicant is a widow, her deceased husband cannot be added as a co-applicant. A co-applicant is someone who shares financial responsibility. If they are deceased, their status as co-applicants should not change. Applicant and co-applicant must belong to the same family and live together. If the co-applicant is the daughter or son of the applicant, they can be considered as co-applicants even if they live in the same or another region due to job-related reasons.
  • Both the applicant and co-applicant must engage in some form of economic activity, generating income through various sources. In cases where two individuals are earning income from different sources, preference will be given.
  • Both the applicant and co-applicant must maintain good financial habits and have a clean track record. Loans should not be overdue or written off. A perfect loan repayment track record is essential.
  • Once the loan is sanctioned, the loan amount should be transferred to the applicant's active bank account. An active bank account should have regular transactions. If the existing bank account is not active, opening a new account is advisable.
  • Monthly EMI (Equated Monthly Installment) amounts should not exceed more than 5 times the monthly income. All expenses, EMIs, and other obligations should be within 15 times the monthly income.
  • All loans taken by both the applicant and other family members must be repaid on time, and a good track record should be maintained. Loans that have gone overdue or have been written off should be avoided.
  • Both the applicant and co-applicant should provide five security cheques. In case an individual doesn't have any cheques, they can apply for a cheque book and debit card when opening a new account.
  • To facilitate loan repayments, NACH (National Automated Clearing House) or E-NACH mandates are required, allowing the EMI amount to be deducted directly from the bank account.
  • Both the applicant and co-applicant should ensure that the EMI amount is deposited into the bank account at least two days before the due date. Bouncing of cheques will result in bank charges, and in such cases, the borrower must pay a penalty of Rs. 500 per bouncing charge alongside the EMI amount. This information should be clearly explained to the client during the loan application process.

Certain individuals should not be considered for loans, including those with political influence, involvement in criminal cases, law enforcement, or the media, as well as previous loan defaulters. Additionally, applicants with significant health issues affecting their finances or single women with dependents should be carefully evaluated before granting loans. However, single women without dependents should still be eligible for loans to support their financial needs.

The loan will be sanctioned for a tenure of 12 months to 24 months. As stipulated within the terms of the loan agreement, the borrower is obligated to adhere to a monthly repayment schedule consisting of both interest and principal repayments. Failure to meet these obligations may result in legal recourse as outlined within the terms and conditions of the agreement.

The minimum amount of the loan can be Rs. 50000, and the maximum loan can be extended up to Rs. 200000.

Interest rates will be fixed on the basis of risk assessment, cost of funds, cost of operations etc and may differ for different schemes and different categories of borrowers. Processing charges as decided from time to time will be recovered.

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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