As per ‘Atmanirbhar Bharat Abhiyan’ or ‘Self-reliant India Scheme’, Government of India introduced various benefits under MUDRA Shishu Category
- Relief of Rs. 1500 crore to MUDRA Shishu loan borrowers
- Rs. 1500 crore Interest subsidy for MUDRA Shishu Loan category
- Government of India shall provide Interest discount of 2% for fast recipients for a period of 12 months
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).
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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, one can approach any of the lending institutions mentioned below in the article. This loan can be availed by contacting Commercial banks, Small finance banks, RRBs, Co-operative banks, MFIs and NBFCs. Individual can also apply online by visiting their official website and filling the application form. Applicant need to have a business plan to acquire a MUDRA loan.
Process of Mudra Loan Online Application
Interested individuals can apply online by visiting any official website of the 29 banks that are listed under this scheme. These banks are inclusive of rural, public and private sector banks. People can get an online form from their official websites, as well.
Applicant has to fill an application form, be it for the Shishu, Kishor or Tarun loan scheme. Download the application form from any given website of the list of banks institutions providing the loan. It is very convenient to apply for this 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. Below mentioned are simple steps to apply online:
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 entities that can avail the MUDRA loan:
- Self-proprietors
- Partnerships
- Service sector firms
- Micro industries
- Repairing shops
- Owners of trucks
- Foodservice businesses
- Vendors (fruits and vegetables)
- Micro manufacturing firms
Steps to Apply for MUDRA Loan
There are numerous banks under this scheme that offers Mudra loan:
- Applicants should visit their nearest commercial or private bank
- Put forth the business idea/plan
- Submit duly filled 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
- Loan will then get sanctioned
Must Read: Is there any subsidy on Mudra loan?
Pointers to help filling the application form:
Every form will have the name of the type of the loan mentioned at the top of the 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 want to get the loan
- Fill name of the applicant correctly and clearly
- Fill in the name of applicant’s father/mother, if asked
- Mention the contact details like 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/ST categories have to provide caste certificates that state the same
- If one have applied for a loan earlier, he/she needs to mention the type of loan, the amount credit and the loan account details
- Give all the required 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
Mudra Loan Categories
There are only 3 types 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 this scheme, 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 this scheme, an applicant can get a loan between Rs. 50,000 and Rs. 5 lakh. 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 this scheme, an applicant can get a loan of Rs. 5 lakh to Rs. 10 lakh. This scheme offers the highest loan amount granted to individuals under the Mudra 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.
Documents Required:
- 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 MUDRA loan can be availed:
- 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
MUDRA Loan Repayment Period
Applicants will receive the loan amount for a time period of 5 years and during these years the applicant will have to re-pay the loan amount to the lender/bank in form of EMIs. The applicant will not find it difficult to pay the instalments since the interest rates are quite low.
Thus, it enables them to grow and develop their business without adding much stress and hassle to their daily routine and finances.
List of Banks Provide Mudra Loan
FAQs
Q. What is the processing time under the Shishu loan scheme?
Ans: The processing time for Shishu loan scheme is 7-10 working days.
Q. Is Mudra loan applicable to all the banks in India?
Ans: Yes, they are offered by almost every private and public sector banks of India.
Q. What is the repayment tenure of loan categories under Mudra loan?
Ans: The repayment period offered under Mudra loan is maximum up to 5 years.
Q. What is the loan amount offered under Mudra Scheme?
Ans: The minimum loan amount offered under this scheme is Rs. 50,000 & maximum goes up to Rs. 10 lakh.
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 by the applicant?
Ans: No, there is no need to provide any security or collateral to banks.
Q. Are physically-challenged people eligible to avail Mudra loan?
Ans: Every Indian citizen is eligible to avail this 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.
Q. Does Paisabazaar.com offer Mudra loan to its customers?
Ans: No, Paisabazaar.com do not provide Mudra loan, however assists its customer in redirecting them to the respective or desired bank so that they can apply loan online or by visiting the nearest bank’s branch.