Mahalir Loan

Mahalir Loan

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Mahalir Loan

Globalisation has given opportunities to several entrepreneurs and businesses to reach great heights. This is possible due to several advancements made in the technologies that have led to the growth of the industries. These advancements have enhanced various women entrepreneurs and women-owned business in the country. The Mahalir Loan is one among the several initiatives that have been implemented by the Government.

Mahalir loan, as the name signifies, is a scheme that has been introduced for women in business to give them a boost to strengthen their business. The loan scheme is suitable for funding working capital and other business related capital requirements. The scheme provides up to Rs. 10 lakhs with interest on diminishing balance. The article discusses in detail about Mahalir Loan.

Objective of Mahalir Loan

Mahalir loans assist with working capital requirements/ term loan to purchase fixed assets like plant and machinery etc.

Eligibility for Mahalir Loan

Mahalir Loan can be availed by women entrepreneurs units that are managed by one or more women entrepreneurs in proprietary concern or in which as an individual or jointly have a share that is not less than 51% as partners/ directors of private limited company/ shareholders/ members of co-operative society.

Form of Advance

WCTL/ WCDL/ Term Loan/ Demand Loan/ Working Capital Limits namely OD, CC etc.

Loan Quantum

The requirement of the borrower is assessed on a case to case basis. The total credit exposure under the loan is confined up to Rs. 10 lakhs.

Repayment Period

The repayment period for working capital limit and term loan/ demand loan are as follows.

  • The working capital limit is one year.
  • Term loan/ demand loan: The repayment is fixed on the basis of income generation of the borrower that is up to a maximum of seven years.


The security offered for primary and collateral is

  • Primary: Hypothecation of stock/ book debts/equipment/machinery and fitting and furniture etc.
  • Collateral: Collateral Security must be obtained to cover the entire advance.


The guarantee has to be obtained from husband/ father of (borrower) the proprietor/ partner. There is no requirement for a third party guarantee.


Comprehensive insurance has to be made on all assets that are hypothecated to the bank. Machinery and collateral security including the building has to be insured.

Rate of Interest

The rate of interest for the Mahalir Loan of the Current Base Rate for lending (BR) is 9.75% per annum.


  • There is no margin for loans up to Rs. 25,000.
  • The margin for loans that are more than Rs. 25,000 is 20%.

Penal Interest

Any irregularity or default in the repayment leads to a consequence of penal interest of 2% per annum over and above the rate of interest on the outstanding balance.

Processing Charges

The processing charges that are applicable to the Mahalir Loan is as follows.

  • Term loan: 1% of limit that is sanctioned without fixing any maximum cap.
  • Working Capital (Fund and Non-Fund Based): 0.50% of the loan amount without fixing maximum cap.

All the above-mentioned terms and conditions are subject to change, and sanctioning of the loans are at the sole discretion of the bank. The Goods and Service Tax (GST) on All Service Charges are extra whenever applicable.

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