What is MUDRA Yojana?
Micro Units Development and Refinance Agency (MUDRA) Loan scheme under PMMY or Pradhan Mantri Mudra Yojana is an initiative by the Government of India that offers loans to individuals and MSMEs with the help of banks and NBFCs. MUDRA Yojana is offered under 3 loan schemes, named Shishu, Kishor, and Tarun. Loans offered by banks under the Mudra scheme are collateral-free.
Features of Mudra Loan
|Types of Mudra Schemes||Shishu, Kishor, and Tarun|
|Interest Rates||As per the applicant’s profile and business requirements|
|Processing Charges||Nil, or 0.50% of the loan amount|
|Collateral/Security||Not required by Banks/NBFCs|
|Repayment Tenure||From 12 months to 5 years|
Mudra Loan Eligibility
Loans under Mudra scheme can be availed by individuals, startups, shopkeepers, retailers, traders, small manufacturers, artisans, MSMEs, and businesses engaged in the Manufacturing, Trading, and Services Sectors, only.
Benefits of Mudra Loan
- Loan amount up to Rs. 10 lakh
- Collateral-free loans
- Low interest rates with even lower processing fees
- Loan covered under Credit Guarantee Schemes from Govt. of India
- Can be used as term loans, working capital loans, and overdraft facilities
- All Non-farm enterprises, i.e. small or micro firms engaged in the income-generating activities can avail Mudra loans
- Mudra loans can also be availed by people belonging to SC/ST category at concessional interest rates
- Loans for Women Entrepreneurs at lower interest rates
How to Apply for Mudra Loan?
The application form is available at mudra.org.in, so you can download the form and fill in all the required details. Different banks may have slightly different application procedures. You must visit the nearest branch of the desired bank from where you want to get the Mudra loan and submit the duly filled application form and complete the bank formalities.
- Duly filled application with passport-sized photographs
- KYC documents of Applicant and Co-applicants: Passport, Voter’s ID card, Aadhar Card, Driving License, PAN card, Utility Bills (Water/Electricity Bills)
- Proof of belonging to a special category, such as SC, ST, OBC, Minority, etc. (if applicable)
- Last 6 months’ bank statement
- Business address and tenure proof, if applicable
- Any other documents required by the bank or NBFC
Note: The Mudra loan application form to be filled and submitted is separate in the case of Shishu, whereas similar for Kishor and Tarun loan scheme.
List of Businesses covered under Mudra Scheme
List of businesses that are covered under the Mudra scheme to perform income-generating activities are mentioned below:
- Commercial Vehicle: Mudra finance for machinery and equipment can be used to purchase commercial transport vehicles like tractors, auto-rickshaws, taxis, trollies, tillers, goods transports vehicles, 3-wheelers, e-rickshaws, etc.
- Service Sector Activities: Starting businesses of salons, gyms, tailoring shops, medical shops, repair shops, and dry cleaning and photocopying shops, etc.
- Food and Textile Product Sector Activities: Various activities involved in the respective sector, such as papad, achaar, ice cream, biscuits, jam, jelly, and sweets making, as well as for agriculture produce preservation at rural level
- Business activities for Traders and Shopkeepers: Setting up shops, service enterprises, trading and business activities, and non-farm income-generating activities
- Equipment Finance Scheme for Micro Units: Maximum loan up to Rs. 10 lakh
- Agri-allied Activities: Activities related to businesses in agri-clinics and agribusiness centers, food & agro-processing units, poultry farming, pisciculture, beekeeping, sorting, livestock-rearing, grading, aggregation agro-industries, dairy, fishery, etc.
Also Read: How to Get Collateral Free Business Loans?
Banks/NBFCs offering loans under Mudra Yojana
Financial institutions that offer MUDRA Loan, directed by RBI are as follows:
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What is Mudra Loan for Women Entrepreneur?
Mudra Yojana under PMMY encourages women entrepreneurship and for that banks & Micro Finance Institutions (MFIs) extend credit facilities, such as reduced or concessional interest rates on loans for women borrowers. Currently, Mudra extends a rebate of 25 Basis Points (BPS) in the interest rates offered from NBFCs and MFIs to female entrepreneurs. The maximum loan amount offered under Mudra Yojana for women entrepreneurs is up to Rs. 10 lakh. The Mudra loan eligibility for women remains the same, as stated for individuals and enterprises.
What is MUDRA Card?
Mudra card is a type of debit card that is issued to the borrowers of Mudra loans to meet their working capital requirements. After Mudra loan approval, the lender opens a Mudra loan account for the borrower and issues a debit card along with it. The loan amount is disbursed in the bank account and further can be withdrawn from the total sanctioned amount in portions by borrowers, as per their business requirements.
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Mudra Loan – Helpline/Customer Care Numbers
National Toll-Free Numbers
Also, To check State Toll-Free Numbers for Pradhan Mantri Mudra Loan Yojana, Click here
Achievements under PMMY (FY 2021-2022)
|No. of PMMY Loans Sanctioned||29781999*|
|Amount Sanctioned||Rs. 180048.39 crore*|
|Amount Disbursed||Rs. 173616.64 crore*|
Note: Source is https://www.mudra.org.in/ and * numbers depicted is provisional data (Updated as on Jan 2022)
FAQs on Mudra Loan
Q. How much time does it take for Mudra Finance to get approved?
Ans. Generally, it takes around 7-10 working days for loan approval by banks in the case of Mudra Yojana under PMMY.
Q. Do I need to submit any security/collateral with the bank to avail loan under Pradhan Mantri Mudra Yojana?
Ans. No, Collateral or security is not required by banks or any financial institution under Mudra Finance.
Q. Is ITR compulsory for Mudra Finance?
Ans. For existing businesses and salaried people, last years’ ITR is necessary to be presented to apply for business loans under Mudra Yojana.
Q. How can I check my Mudra loan status?
Ans. You can check your mudra loan status online by visiting the respective bank’s website and checking via its e-mudra loan application status section.
Q. Which banks offer PM Mudra loans?
Ans. Private and public sector banks, Small Finance Banks (SFBs), Micro Finance Institutions (MFIs), Non-Banking Financial Companies (NBFCs), Regional Rural Banks (RRBs), and Commercial banks in both private and public sectors offer Pradhan Mantri Mudra Loans, as per sole permission and directions from the RBI.
Also Read: How to get a business loan in India
Q. Is there any special Mudra loan scheme for women?
Ans. Yes, United Mahila Udhyami Yojana is a part of the Mudra loan scheme exclusively for women entrepreneurs. Under this, women engaged in production, manufacturing, or service-related economic activities can apply for a loan. This scheme is specially formulated to empower women entrepreneurs and encourage them further. Women with more than 50% financial holdings in a company can also apply for a Mudra loan under this category.
Q. We own bakery business and want to expand it. Can we avail Mudra Loans?
Ans. Yes, you can avail assistance under the “Shishu” or “Kishor” category of the Micro Credit Scheme of MUDRA to expand your business. Contact your nearest Bank and Micro Finance Institution (MFI) to know the application procedure.
Q. I have done a course on fashion designing. I want to open my own boutique and develop my own brand. What help can MUDRA offer to me?
Ans. Mudra Yojana offers loans that can be used to start your own boutique. You can visit the nearest bank that offers Mudra loans with all the required documents to apply for a business loan. You can also visit the official website to download the application form.