How business loans and Aadhaar are connected?

Posted by Digital on September 25th, 2018

KYC is one of the most important documentation to obtain small business loans. The applicants are required to put forward identity proof as well as residential proof. Documents such as passports and voter identity cards work as both identity and residential proofs. Another addition to the KYC list of documents is Aadhar card. This means that you can use Aadhaar card an individual document to apply for loans.

 What is Aadhaar?

 It is a 12-digit unique identification number issued by the Unique Identification Authority of India (UDAI). It captures an individual’s demographic (name, birth date, gender, and address) and biometric data(iris scan and fingerprints). While there are a host of other identity and address documents like PAN card, driving license, electricity bill, etc. that individuals can furnish as proofs, none of them holds information in detail as Aadhaar card. By presenting Aadhaar number in banks, financial institutions, telecom companies, real estate companies, government schemes and anywhere else where identification is compulsory, the individual does not have to give any other id or address proof.

 It is obligatory for the Indian citizens to link their Aadhaar number with all bank accounts (personal and business), mobile numbers, ration card, PAN, voter identity card and even LPG connections.

 The relevance of Aadhaar in Business Loans

 Aadhaar acts a standalone KYC document for a business loan for SME. The processing of loan application becomes quicker since Aadhaar contains all information that business loan providers including banks and digital lending platforms seek during verification of the applicant. The lending institutions do not have to spend much time doing a background check on your profile.

 Online lending platforms approve and disburse quick business loans within 5-7 days. You can upload the Aadhaar and other supporting documents online, the post which Fintech lenders verify your application using innovative technology and a mix of algorithms. If you present Aadhaar number as proof, the verification process is even quicker, and the loan amount can be credited to your bank account within no time.

 Given the benefits that Aadhaar offers in securing small business loans, it is suggested to apply for Aadhaar card now. And, if you already do have, then make sure it is linked to your bank account, mobile numbers, and other documents so that there is no delay in availing quick business loans!