Who is Eligible for Mudra Loan?
- Applicants with minimum age of 18 years and maximum 65 years
- Individuals, Startups, business owners, entrepreneurs, SMEs, MSMEs are eligible
- Traders, Artisans, Manufacturers, Retailers, etc. engaged only in trading, services and manufacturing sectors are also eligible
- Applicants with good repayment history
- People belonging to SC/ST/OBC category can apply for Mudra loan
- Applicants with no loan defaults with any financial institution
- Indian Citizens with no past criminal background
Micro-Units Development and Refinance Agency (MUDRA) Scheme is an initiative by Government of India under Pradhan Mantri Mudra Yojana (PMMY) to promote small businesses, micro units and MSMEs by providing funding support with the help of various banks for their business expansion and growth. The maximum loan amount offered under MUDRA scheme is up to Rs. 10 lakh with repayment tenure up to 5 years. Applicants are not required to submit any collateral / security or any third party guarantee to apply for a Mudra loan.
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Eligible Loan Amount for Various Types of Mudra Loan
Mudra loan scheme is categorized in 3 loan schemes, named as Shishu, Kishor and Tarun. The minimum loan amount to borrow has no limit and maximum loan amount is up to Rs. 10 lakh.
- Shishu: Max. Loan amount up to Rs. 50,000 (For start-ups and business owners)
- Kishor: Loan amount from Rs. 50,000 to Rs. 5 lakh (To meet working capital requirements and business expansion for new and existing enterprises)
- Tarun: Loan amount from Rs. 5 lakh to Rs. 10 lakh (For established enterprises to manage business cash flow)
List of Banks Offering Mudra Loans in 2021
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What are the documents required for Mudra Loans under PMMY?
- Self-drafted Business Plan
- Duly filled application form with 2 recent passport size photographs
- KYC documents of the applicant, such as Proof of Identity, Age Proof, Proof of Residence, Income Proof
- KYC documents shall include Passport, Aadhar card, PAN card, Voter ID card, Driving License, Birth Certificate, Utility Bills (Water & Electricity)
- Proof of belonging to a special category such as SC, ST, OBC, Minority, etc.
- Any other document required by the lender
FAQs on Mudra Loan Eligibility
Q1. How to improve your Mudra Loan Eligibility?
A. Mudra Loan eligibility can be improved by enhancing your source of income, maintaining good repayment history, having no future loan defaults and improving your creditworthiness.
Q2. How can I check my Mudra loan eligibility?
Ans. You can check Mudra loan eligibility by visiting the official website of the desired bank and filling in the required details to clear the eligibility criteria.
Q3. Will I be eligible for a Mudra loan even if I have bad credit?
Ans. Generally, banks do not check CIBIL score before sanctioning Mudra loan. However, it is recommended to maintain good credit score to secure your financial future.
Q4. How does my income affect my eligibility?
Ans. If your combined family income is high, then it becomes easy for banks to sanction Mudra loan, considering that you shall be able to repay the loan on time.
Q5. Do I need to have an account in the same bank to get a Mudra loan?
A. No, it is not mandatory to apply for a Mudra loan from a bank where you hold an account. However, having a bank account in the same bank might improve your chances of getting a Mudra loan approval.
Q6. I want to start a business, which Mudra loan should I apply for?
A. The Mudra shishu loan is the best option for start-ups and to meet your business requirement. All you need to do is present your business idea along with the application form and relevant documents to meet the Mudra loan eligibility requirements and apply for the loan.
Q7. What is the maximum limit of the Mudra loan?
Ans. There is no minimum loan amount limit to meet your mudra loan requirements.
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Q10. What is the contribution of recent scheme named as ‘Atmanirbhar Bharat Abhiyan’by Government of India?
A. 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
Q11. Is CIBIL score required by Banks for Mudra loan?
Ans. No, CIBIL score is not checked by banks, if an applicant is applying for Mudra loan.
Q12. Are handicapped persons also eligible for loans under PMMY?
Ans. Every Indian citizen is eligible to avail Mudra loan, irrespective of their physical condition.
Q13. Are MUDRA loans available for buying a tempo, taxi or auto?
Ans. Yes, only if the applicant is going to use these vehicles, such as tempos, taxis and autorickshaws for commercial purposes.