MUDRA Loan Subsidy

No Subsidy is offered by any Banks/NBFCs or financial institutions for Mudra Loan under PMMY.

Mudra Loan under Pradhan Mantri Mudra Yojana (PMMY), business loans, working capital loans, or Overdraft are offered to individuals, self-employed professionals, business owners, entrepreneurs, and MSMEs to meet their day-to-day business requirements and for business expansion purposes. However, there is NO subsidy offered under Mudra Loan by any financial institution in India.

MUDRA (Micro Unit’s Developments and Refinances Agency) loan scheme was launched under  Pradhan Mantri MUDRA Yojana (PMMY) with an aim to offer financial support in form of credit facilities to non-corporate, non-farm small, and micro-enterprises. To avail the MUDRA loan, the applicants can approach the nearest Bank branch of selected and eligible Private and Public Sector Banks, NBFCs, Cooperative Banks, Regional Rural Banks, etc.

Also Read: How to Apply for SBI e–Mudra Loan

Types of MUDRA Loans

Types of 3 Mudra loan schemes along with offered loan amount:

• Shishu: Loan Scheme: Up to Rs. 50,000
• Kishor: Loan Scheme: From Rs. 50,001 and up to Rs. 5,00,000
• Tarun: Loan Scheme: From Rs. 5,00,001 and up to Rs. 10,00,000

MUDRA loan is offered under three loan scheme categories as below mentioned with additional information:

• Shishu: This loan scheme is best suited for businesses that are at the initial stage of their business or are looking to start one. The maximum amount offered under the Shishu loan is Rs. 50,000
• Kishor: For an individual who has already es­tablished his/her business, but needs additional funding to enhance his/her business can opt for the Kishor loan scheme. It offers a minimum loan amount of Rs. 50,000 and a maximum of Rs. 5 lakh
• Tarun: Tarun loan scheme covers business expenses ranging from a minimum of Rs. 5 lakh to a maximum of Rs. 10 lakh. However, this loan to has a certain norms and requirements to be fulfilled before getting the loan sanctioned

Must Read: How to apply for Mudra loan online

Rate of Interest and Repayment Tenure

The rate of interest offered by financial institutions under Mudra Yojana for its loan schemes named as Shishu, Kishor, and Tarun shall vary from lender to lender and shall depend upon the applicant’s profile and business requirements. The maximum repayment tenure offered by Banks is up to 5 years and may exceed as per business requirements and special cases.

Eligibility Criteria

This loan is available to applicants who comply with the specific guidelines under this loan:

• Age criteria: Min. 18 years and Max. 65 years
• Corporate entities are not eligible for the MUDRA loan
• MUDRA loans are not offered to companies involved with non-farm income-generating activities
• Applicants with good repayment history and creditworthiness
• Applicants with no previous defaults with any bank

Also Read: Documents required to avail the Pradhan Mantri Mudra Loan

Activities covered under MUDRA Yojana

The primary objective of a MUDRA loan is to extend credit to Small and Medium Enterprises (SMEs) at all stages of growth. To ensure this, the products offered under the MUDRA Yojana are designed in a way to suit and meets the requirements of various businesses. MUDRA loans are extended to cover the following activities:

• Transport vehicle: MUDRA Yojana extends credit under which purchase of transport vehicles for the transport of goods and for personal use that will generate income. Vehicles such as auto-rickshaws, small trucks, three-wheelers, passenger cars, taxis, etc. can be purchased
• Community, social, and personal service activities: Businesses in the service industry such as salons, beauty parlors, gyms, tailoring shops, clothing stores, cycle, car, motorcycle garages, stationery stores, phone booths, medicine stores, local courier facilities, so on can be started
• Food and processing units: Small and micro enterprises engaged in papad making, jelly and jam making, achaar making, ice making, buns and bread making, cold storages, small storages for preserving local agricultural produce, small canteens and door-to-door catering services and so on can be undertaken
• Textile sector: MUDRA Yojana provides support to enterprises engaged in traditional zari, chikan, zardozi, and handmade embroidery as well as dyeing, printing, and designing of apparel. Enterprises engaged in handloom, power loom, computerized embroidery etc. are also supported.

Check – Mudra Loan Interest Rates of Top Banks

The Pradhan Mantri MUDRA Yojana offers assistance to Small Scale Industries (SSIs) and entrepreneurs by offering loans at the low rate of interest and also offering MUDRA cards with a pre-decided credit limit. Until now, there is no statement made by the Prime Minister or the Ministry State of Finance on a subsidy being provided on MUDRA loans.

There has been an immense growth in the demand for small business loans in the market and to cater to the diverse financial requirements of these businesses various new business loan schemes have been introduced. Despite all this, a major section of micro-enterprises is still unable to find funding for their businesses. To provide financial support to such businesses MUDRA loans were introduced. These loans, through money, assist the micro-enterprises in entering the mainstream market.

FAQs

Q. Is There Any Subsidy Under PMMY? If So, what details thereof?

Ans. No, there is no subsidy offered for Mudra Loan under Pradhan Mantri Mudra Yojana (PMMY).

Q. What is the Mudra loan subsidy percentage offered by financial institutions?

Ans. There is no Mudra loan subsidy percentage offered under Mudra Yojana. Business loan amounts up to Rs. 10 lakhs are offered at attractive interest rates by banks with no processing fees are offered under Mudra scheme.

Q. Is there any Mudra loan subsidy for people falling under SC/ST/OBC category?

Ans. No, there is no subsidy offered for SC/ST/OBC category