Apart from providing Income Generation Loan, Shalom also gives Business Loan to the Group members. The purpose of this loan is to provide financial assistance to small business groups. They can utilise the Shalom business loan for further investment in the existing business or setting up new tiny business ventures. Since the rate of interest and the repayment schedule are formulated to suit the requirements of the loanees, there exists enormous demands for this product.
Another reason for the growing demand for BL is the exorbitant interest rate charged by the local money lenders. Small-scale businessmen often borrow money from money lenders, unknowing that it is a death trap or a vicious circle. Once they are trapped by the ruthless local money lenders, business people can never come out of the trap. Besides, the petty businessmen cannot have adequate access to established financial institutions or nationalised banks in the overall financial system due to the lack of proper documents needed by the banks.
Against this financial background, Shalom Business Loan has witnessed a tremendous growth over the years. Under this category Shalom provides Rs. 5,000 to Rs.25,000 to the needy group members. Depending upon the nature and structure of the business, the loan amount will vary within the specified framework. The rate of interest is 12% per annum and the processing fee is 3% of the total loan amount. The loan duration is 100 days, i.e. the loanee has to make the repayment with interest and principle in 100 days.