Applying for an MSME Loan: Online vs Offline Mode

August 30, 2023
Updated on

Online and offline are two main ways to apply for a business loan. The decision to go for a business loan online or offline is up to the small business owner. If Micro, Small and Medium Enterprises (MSMEs) are looking for a convenient and secure way to acquire an MSME loan, then online lending is a great option. However, if businesses value the personal touch, then they may consider an offline application. 

In today’s digital era, the business world has undergone a significant transformation. Therefore, securing timely financial assistance is vital for their growth and sustainability. When it comes to obtaining an MSME loan, business owners now have the choice between applying online or offline. In this blog post, we will explore the advantages and disadvantages of both modes to help MSMEs make informed decisions and navigate the loan application process effectively.

The Offline Mode

In India, the traditional method of obtaining loans has been through the offline mode. In this case, the borrower goes to a lender or a financial institution in person and applies for a loan by filling out a form and submitting the necessary documents. The potential lender verifies physical copies of the required documents, and the person applying for the loan may be granted the loan if his or her profile qualifies for one. 

When obtaining an MSME loan from Kinara in person, the business owner develops relationships with the loan officer. The rapport that a businessperson establishes can allow both parties to understand their respective needs. Since Kinara officers visit the home or business location of the customer and interact with them, it can save time and effort. MSMEs also don’t have to take the time to visit a branch. The requisite documents can also be collected in person by the Kinara Officer so that the process is secure and hassle-free for the customer.

Advantages of physical mode:

Personal Interaction and Relationship Building:

Offline loan application processes allow for face-to-face interaction with bank officials or loan officers. This can be advantageous for MSMEs seeking a more personalised experience. In-person meetings enable business owners to present their cases, discuss their business plans, and build relationships with the lender. Such interactions may lead to a better understanding of the business and its financial requirements, potentially resulting in customised loan solutions. 

Assistance with Documentation:

For MSMEs that may find compiling the required documentation challenging, offline mode provides an advantage. Bank personnel or loan officers can assist in gathering the necessary paperwork and guide business owners through the documentation process. This hands-on support can help streamline the application and ensure all required documents are submitted accurately and promptly.

Trust and Credibility:

Traditional banking institutions have an established reputation and a sense of trust among businesses. Some MSMEs may prefer the familiarity and reliability associated with these institutions. Offline loan applications allow for direct engagement with well-known banks, which can enhance the borrower’s credibility and potentially lead to favourable loan terms and conditions.

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The Online Mode

Online lending and borrowing are becoming increasingly common today. The online mode of applying for an MSME loan is a convenient and secure way to get the financing MSMEs need to grow their business. This is because online applications can be completed from anywhere, at any time, using a smartphone or laptop that is connected to the internet. It is as secure as offline applications. 

Additionally, online applications can be processed much faster than offline applications. To apply for a business loan online, MSMEs must choose a lender, gather their documents, complete the application, and wait for approval. In online mode, the decision to disbursement will be much faster than in offline mode. If the loan is approved, MSMEs will receive the funds in their bank account within a few hours to days, depending on the lender. 

When a person applies for an online business loan from Kinara, they can determine the amount of loan available as well as their eligibility criteria by visiting Kinara’s website. Once they clear their eligibility, they can fill out the necessary forms and upload the required documents online to obtain the loan. Small business entrepreneurs will receive the loan amount digitally in their bank account within 24-hours.

Benefits of online mode:

Convenience and Accessibility:

One of the primary benefits of applying for an MSME loan online is the convenience it offers. Business owners can access loan applications and related information from anywhere at any time, as long as they have an internet connection. Online loan platforms eliminate the need to physically visit banks or financial institutions, saving time and effort. Additionally, online applications can be completed at the business owner’s own pace, allowing for flexibility in managing other business responsibilities.

Faster Processing and Approval:

Online loan applications are typically processed and approved faster than their offline counterparts. The digital nature of online platforms enables quick verification and evaluation of documents, reducing the time required for manual processing. MSMEs can receive a decision on their loan application within days or even hours, which is especially beneficial for businesses needing urgent funding.

Wide Range of Options:

Applying for an MSME loan online opens up a plethora of options. Numerous financial institutions and alternative lending platforms have established their online presence, offering various loan products tailored to meet the diverse needs of MSMEs. This allows business owners to compare interest rates, terms, and repayment options more easily, empowering them to make an informed decision based on their specific requirements.

Enhanced Transparency:

Online loan applications provide greater transparency throughout the process. Business owners can track the progress of their applications, receive regular updates, and access loan-related documents online. The digital trail ensures that all interactions and communications are documented, reducing the chances of miscommunication or misunderstandings.

Offline or Online Mode is better?

Both online and offline modes of applying for an MSME loan have their own set of advantages and disadvantages. The choice between the two depends on the specific needs and preferences of the business owner. Online mode offers convenience, speed, a wide range of options, and transparency, making it an attractive choice for many MSMEs. On the other hand, offline mode provides personal interaction, hands-on assistance with documentation, and the trust of established banking institutions. 

For example, a small business entrepreneur who is not well equipped with the online application mode may prefer an offline business loan because they will understand the application process and loan terms and conditions better in a face-to-face conversation than they would online. On the other hand, a business owner with at least a basic knowledge of how things work online may find it easier to obtain an online MSME loan because they are easier to apply from anywhere in the world. 

Digital advancements such as Aadhaar-based authentication, digital land/property records, e-signatures, and e-banking have aided the growth of online business loans. Still, what we’ve seen so far is only the beginning. Lending has expanded from a relationship-based activity to one that is also based on data and algorithms, which benefits both lenders and borrowers.


Online and offline mode of applying for a business loan has its pros and cons. Ultimately, the decision should be based on factors such as the urgency of funds, the complexity of the loan application, the availability of online platforms, and the relationship a business owner wishes to establish with the lender. Whichever mode is chosen, MSMEs must ensure they understand the terms and conditions of the loan, assess their repayment capabilities, and carefully evaluate the financial implications before proceeding.

By leveraging the benefits of technology and understanding the strengths of offline interactions, MSMEs can navigate the loan application process efficiently and secure the financial support they need to thrive in today’s competitive business landscape.

Kinara makes things easier by ensuring that both the online process and the offline one are easy and fast and can be accessed from anywhere conveniently. MSMEs can begin the process by performing a quick 1-minute eligibility check on the myKinara App. Moreover, Kinara’s dedicated in-house customer support team is readily available for any queries or assistance at 080-68264454. It ensures entrepreneurs can access the necessary guidance and support throughout the business loan process. 

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