Business Overdraft (OD) Loan | Dukandar Overdraft Facility
Business Overdraft (OD) Loan | Dukandar Overdraft Facility
Blog Article
The Dukandar Overdraft Facility is a specialized financial product designed to cater to small shop owners and retailers in India. It allows dukandars (shopkeepers) to access short-term credit to meet their immediate working capital needs.
How It Works
The Dukandar Overdraft Facility works like a regular overdraft loan but is specifically tailored to the needs of small retailers. Shop owners can withdraw funds from their overdraft account even if their balance is zero, providing them with quick access to cash for inventory restocking, paying suppliers, or handling day-to-day operational expenses.
Eligibility Criteria
Most financial institutions offering the Dukandar Overdraft Facility look at factors such as the shop’s turnover, bank account history, and credit score to determine the overdraft limit. Generally, shop owners need to have a current account and a stable business operation to be eligible.
Key Features
- Flexible Credit Limit: The overdraft limit is usually based on the business’s average monthly revenue, ensuring that dukandars can access funds that match their operational scale.
- No Fixed Repayment: Shopkeepers are not required to adhere to a strict repayment schedule. They can repay the overdraft amount whenever they have the cash flow to do so, reducing financial pressure.
- Pay Interest Only on the Utilized Amount: Interest is charged only on the amount withdrawn, making it a cost-effective solution for managing day-to-day cash flow.
Why It’s Useful for Shop Owners
The retail sector often faces fluctuating cash flows due to seasonal sales, changing customer demand, and delayed payments from suppliers. The Dukandar Overdraft Facility provides financial flexibility to shop owners, helping them maintain liquidity and ensure smooth operations.
For small shopkeepers, the Dukandar Overdraft Facility is a lifeline, offering the funds they need to keep their businesses running smoothly without the burden of fixed loan repayments. Report this page