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Documents Required for Applying MUDRA Loan
Find below the checklist of the required documents before applying for a Mudra Loan:
- Duly filled Mudra application form (PDF format) with Passport-sized photographs
- KYC documents for the applicant include Passport, Voter’s ID card, Driving License, PAN card, Adhaar Card, Utility Bills (Water/Electricity Bills), Birth certificate, Class X certificate
- Income Proof: Last 12 months’ bank statement
- Last years’ ITR, if applicable
- Proof of belonging to SC/ST/OBC Category, if applicable
- Any other document required by the bank
Therefore, based on the type of business, required documentation is required to be furnished along with the standard set of MUDRA loan documents for a specific loan scheme, named Shishu, Kishor, or Tarun.
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Micro Units Development and Refinance Agency (MUDRA) loans are offered to individuals and MSMEs by permitted and eligible financial institutions directed as per RBI, such as public and private sector banks, Non-banking Financial Companies (NBFCs), Small Finance Banks (SFBs), Micro Finance Institutions (MFIs), Co-operative banks and Regional Rural Banks (RRBs).
MUDRA scheme was initiated by the Government of India under Pradhan Mantri MUDRA Yojana (PMMY) to provide funding support to Individuals, Startups, new and existing businesses, and MSMEs and to promote the MSME sector in India. Further discussed are the features, eligibility, and loan types of the Mudra loan scheme:
Mudra Yojana Features
- Age Criteria: Minimum 18 years & Maximum 65 years
- Interest rate: Varies from bank to bank
- Minimum loan amount – Rs. 30,000
- Maximum loan amount is up to Rs. 10 lakh
- Collateral or Security: Not required
- Processing Fee: Nil
- Repayment Tenure: Up to 5 years
- Applicants with no past loan defaults shall be considered
Mudra Loan Eligible Entities
Mudra Loan can be availed by the following entities:
- Individuals and MSMEs
- Artisans, Vendors, Traders, Retailers, Manufacturers
- Sole Proprietorship, Partnership Firms, Limited Liability Partnerships (LLPs), only engaged in trading, manufacturing, and services sectors
- Small and Micro Manufacturing Units
- Small Scale Industry (SSI) Units
Types of MUDRA loan
Based on the growth phase and development stage of the business as well as the funding requirement, MUDRA loans are available in three categories named Shishu, Kishor, and Tarun. Further mentioned is the sanctioned loan amount offered under each category:
- Under SHISHU Category: Loans up to Rs. 50,000
- Under KISHOR Category: Loans from Rs. 50,001 to Rs. 500,000
- Under TARUN Category: Loans from Rs. 500,001 to Rs. 10,00,000
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Achievements under PMMY 2019-2020
As per Mudra’s official website, as of 31 March 2020 in the financial year of 2019-20, the total number of PMMY loans sanctioned to date is 62237981. The amount sanctioned is Rs. 337465.13 Crore and the amount disbursed is Rs. 329684.63 Crore.
The emphasis of this scheme is towards the starting of business or entrepreneurship by women, tribal communities, Dalits, and all the backward sections of the society. The MUDRA loan is directed to these particular segments and shall enable faster growth of small businesses and assist people who are in the lower-income bracket to achieve financial support and reach for better livelihood and thus contributing positively towards the overall economy’s growth of the country.
Also Know: What are the Documents Required for New Business Loan