Differences between a Micro Loan and Personal Loan

Micro loans do share some similarities with personal loans. No collateral or guarantors are
required to apply, fast approval, and both of them use flat interest rates. However, there are
also some key differences:
Micro Loan

Personal Loan

Loan Amount

Relatively small, generally ranging

between RM1,000 to RM50,000

The loan amount is larger,

generally ranging from RM5,000
to RM200,000.

Loan Tenure

The loan tenure is relatively

shorter, normally up to 5 years at
most.

Personal loans can have longer

loan tenures, up to 10 years.

Requirement or
Eligibility

Emphasis on validity of business.

E.g.:

Emphasis on income
requirements and Debt Servicing
Ratio.

Eg: Minimum monthly salary

requirement for Maybank
Personal Loan is RM2, 500.

Irrelevant

Any individual that can show

proof of income

No limitations on use

I.Must have valid business license/permit.

II.Must be owner operated and on a full
time basis.
III.Must have been operational at least 6
months 2 years
Eligible
Economic Sector

Customer Type

Some loans are only for specific

economic sectors.

E.g.: PBMicro Finance is only for

agriculture, services and
manufacturing sector

E.g.: BSN Teman Mesra is only for

manufacturing, service and retail
sector.

Self employee

Micro enterprises. The definition

of micro enterprise is as in the
following:

I. Sales turnover not exceeding

RM300,000 OR full-time employees not
exceeding 5
Financing
Purpose

Working capital and capital

expenditure

Financing for fixed assets not

allowed

Not for personal use

Banks perform random checks on

the proper use of the money