Micro-Units Development and Refinance Agency (MUDRA) is a loan scheme that comes under the Pradhan Mantri Mudra Yojana (PMMY) launched by Government of India. The Pradhan Mantri MUDRA Yojana is an effort to assist Micro, Small and Medium Enterprises (MSMEs). The main objective of this government scheme is to ‘fund the unfunded.’ This scheme offers loans of up to Rs. 10 lakh to non-corporate, non-farm sectors and small or micro-enterprises. To avail these loans, you can approach any of the lending institutions mentioned here. Mudra loan can be availed by contacting Commercial banks, Small finance banks, RRBs, Co-operative banks, MFIs and NBFCs. You can also apply for Mudra loan online by filling the application form by visiting their official website.
You need to have a business plan to acquire a MUDRA loan. You cannot obtain a MUDRA loan for your personal requirements like buying a car, bike, etc.
How to apply for MUDRA bank loan?
There are 70 banks listed under this scheme. As an applicant, you can visit any of these 70 banks and carry on further with the process.
- Applicants should visit their nearest commercial or private bank
- Put forth your business idea/plan
- Submit your loan application form
- Additional documents to be submitted- identity proof, address proof, company address proof, company identity proof, caste certificate, balance sheets, IT returns, sales tax returns of the last three years, and other machinery details
- Complete all further formalities and procedures by the bank
- Your documents will be verified
- A loan will then be sanctioned to you
Must Read: Is there any subsidy on Mudra loan?
You can apply online for a mudra loan by visiting any one official website (mudra.org.in) of the 70 banks that are listed under this scheme. These banks are inclusive of rural, public and private sector banks. You can get an online form from their official websites.
You have to fill a loan application form, be it for the Kishor loan, Tarun loan or the Shishu loan. You can download this loan application form from any given website of the list of banks institutions providing the loan. It is very convenient to apply for the MUDRA loan application online, since this will avoid the hassle and commotion of going to the bank, waiting in line and then acquiring the loan application form.
Step 1: Download the loan application form
Step 2: Fill in the form details correctly
Step 3: Find the public or commercial sector bank
Step 4: Finish all the other formalities by the bank
Step 5: Once this process is done, the loan will be sanctioned
Kinds of business components that can avail the MUDRA loan:
- Service sector firms
- Micro industries
- Repairing shops
- Owners of trucks
- Foodservice businesses
- Vendors (fruits and vegetables)
- Micro manufacturing firms
- Proof of identity
- Residency proof
- Machinery and other items quotations
- Passport size photographs
- Proof of business identity
- Proof of business address
Here are some cases in which you can avail MUDRA loan:
- Overdraft facility
- Dropline overdraft
- Loans for commercial vans, two-wheelers
- Loans for purchasing machinery and other resources
- Renovation of offices
- Loans required for agriculture-related activities
Pointers to help you fill the loan application form:
Every form will have the name of the type of the loan mentioned at the top of the loan application form. The form for Shishu loan is different, whereas the form for the Tarun and Kishor loan is the same.
- Fill in absolutely accurate details of the name of the bank and the branch from where you want to get the loan
- Fill your name correctly and clearly
- Fill in the name of your father/mother, if asked
- Mention your contact details. Your current mobile number and address
- Religion and nationality also should also be mentioned clearly
- Aadhaar card details to be filled
- Mention the expenditure for setting up the business and the average amount needed to do so
- Every information of sales made by the company in the past, their current sales and their probable sales in the near future
- Provide all pertinent documents to support the information given in this form, this basically assists the company in making a final decision
- Applicants who come under OBC, SC and ST categories have to provide caste certificates that state the same
- If you have applied for a loan earlier, you need to mention the type of loan, the amount credit and the loan account details
- Give all your documents for verification. (At the end page of every loan application form, the entire list of all the documents required for verification is given.)
- Attach two recent photographs
There are a few kinds of MUDRA loans offered through this scheme. Depending upon the pace of growth and development phase of a business, along with the funding need; mudra offers loans based on the three classifications give as below.
- Shishu: Under the Shishu loan, an applicant can obtain a loan of up to Rs. 50,000. This kind of loan is meant for people who require lesser funds. It is given to those who are just beginning or starting their business and need funds
- Kishor: Under the Kishor loan, an applicant can get a loan between Rs. 50,000 and Rs. 5 lakhs. This type of loan is suitable for applicants that have already begun their business but need some more money to improve it. It is given to those individuals whose businesses have started but have not yet been established. The interest rate is dependent upon the institution lending the funds. In the Kishor loan, business scheme and the credit part of the person applying for this loan plays a significant role in deciding the rate of interest. The bank also decides the period for repayment
- Tarun: Under the Tarun loan, an applicant can get a loan of Rs. 5 lakhs to Rs. 10 lakhs. This loan offers the highest loan amount granted to individuals under the MUDRA loan scheme. It is given to those whose businesses are established but they need finance to expand their businesses.
Again, the credit history and the scheme play an important role in determining the repayment tenure as well as the interest rate
MUDRA Loan Repayment Period
Applicants will receive the loan amount for a time period of five years. While this time, the applicant will pay the bank in instalments. The applicant will not find it difficult to pay the instalments since the interest rates are quite low.
Thus, a MUDRA loan enables them to grow and develop their business without adding much stress and hassle to their daily routine and finances.
List of a few banks under the Mudra loan scheme:
|List of Banks|
|State Bank of India|
|State Bank of Travancore|
|United Bank of India|
|Indian Overseas Bank|
|Punjab and Sind Bank|
|Central Bank of India|
|Bank of Maharashtra|
|Bank of Baroda|
|Union Bank of India|
|Oriental Bank of Commerce|
|Bank of India|
Various surveys highlight the importance of the government helping these small scale enterprises to grow, develop and increase the economy of India. MUDRA loan online applying for the form is very convenient and time-saving.In conclusion, this initiative definitely seems like a step closer to the development of the economy of the country. Along will assisting small or micro business in their development, indirectly this scheme also helps to increase the growth rate of the country’s economy. According to statistics, there are around 5.77 crore small and micro business firms/ enterprises that include manufacturing, retailing, trading and producing on a larger scale.
Q. Is Mudra loan applicable to all the banks in India?
Ans. Yes, loans up to min. Rs. 50,000 & max. up to Rs. 10 lakh is applicable to all banks in India.
Q. What is the interest rate offered by Mudra Loan?
Ans. As per the guidelines of RBI, Mudra loan is offered at reasonable interest rate depending on the applicant’s requirements and profile.
Q. Is any collateral or security required to be deposited to avail Mudra loan?
Ans. No, there is no need to provide any security or collateral to banks.
Q. Does differently-able people are eligible to take Mudra loan?
Ans. Every Indian citizen is eligible to avail Mudra loan that has a business plan for income generation activity.
Q. Is there any kind of subsidy under the Pradhan Mantri MUDRA Yojana (PMMY)?
Ans: There is no subsidy given under this scheme. However, if the loan is linked to any government scheme wherein the government is providing the subsidy, it will be eligible under the Pradhan Mantri Mudra Yojana (PMMY).
Q. Is there any specific format of application to avail MUDRA loans?
Ans: Yes. For the Shishu loan, a one-page format application has been designated. Whereas, for the Kishor and Tarun loan schemes, a three-page specific application format has been designed. Both of which have been posted on the MUDRA website.
Q. Are MUDRA loans available for buying a tempo, taxi or an auto?
Ans: Yes, only if the applicant is going to use these vehicles for the purpose of public transportation.