• Simplified processes

The main aim for the government to render these types of loans is that making the loan process simpler and easier for the rural people. The idea behind offering minor loans under an amount of Rs. 1 Lakh is to get into the livelihood details of the family that are a part of this scheme.

• Enhance the status of people

As per the estimates, as many as 8.5 crore people abelong to the rural and poor households. They have been identified as a part of the Socio Economic Caste Census. The plan of the governemt is to link the census will the plan of rolling the micro loans upto Rs. 1 lakh. 

• Livelihood creation

In order to reduce the dependence of the rural people on moneylenders, as well as, the microfinance companies, the government is aiming to double rank the linkage with an aim to provide as much as Rs. 60,000 crore in a year and help people create a means of earning their livelihood which puts them in a comfortable space.

Usually, in the rural areas, the moneylenders in villages tend to offer a huge rate of interest for these poor people who are unable to pay them off. This creates issues, increases their liability and further keeps them pushing to enter and going deep into debt traps.

These factors and the unavailbility of loans in the past has jad an adverse impact on poor people like farmers, workers, part-time workers, daily-wage earners, labourers, seasonal employement workers amongst others.