MUDRA Loan scheme under Pradhan Mantri Mudra Yojana (PMMY) is an initiative by Government of India that offers loans to individuals and MSMEs. Micro-Units Development and Refinance Agency (MUDRA) gives loan under 3 main categories named as Shishu, Kishor, and Tarun. The maximum loan amount offered under MUDRA scheme is up to Rs. 10 lakh with repayment tenure up to 5 years.
Pradhan Mantri MUDRA loan scheme helps individuals and Micro, Small and Medium Enterprises (MSMEs) to grow and expand their businesses, manage cash flow or to meet their working capital requirements.
Mudra Loan DetailsTable of Contents : |
Types of Mudra Loans
There are three types of Mudra Loan Schemes
- Under SHISHU Category: Loans upto 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
Maximum Loan Amount that can be availed under PM Mudra Loan is Upto Rs 10 Lakh
Also Read: Mudra Loan Application Form Important Fields & Sections
MUDRA Loan Features & Benefits
- Interest rate: Varies from bank to bank
- Loan Amount: Depends on business requirements
- Collateral/Security: Not required
- Minimum loan amount: No limit
- Maximum loan amount: Up to Rs. 10 lakh
- Repayment Tenure: Up to 5 years
- Processing Charges: Nil
- Availed by enterprises engaged in Manufacturing, Trading and Services Sectors, only
- All Non-farm enterprises, i.e. small or micro firms engaged in the income generating activities can avail MUDRA loan
- Availed loan amount can be used for Term Loans and Overdraft facilities
Also Read: How to Get Collateral Free Business Loans?
Mudra Loan Interest Rate
The interest rate offered under Mudra loan depends on applicant’s profile and business requirements of the enterprise. However, it varies from bank to bank, as they follow their defined guidelines to finalise on the interest rate to be offered to various applicants.
Mudra Loan Eligibility
Mudra loan can be availed by the following entities:
- Applicants with minimum age of 18 years and maximum 65 years
- Individuals and MSMEs
- Business owners
- Traders
- Retailers
- Manufacturers
- Small Industrialists
- Individuals involved with Agricultural activities
- Startup entrepreneurs
Who provides Mudra Loan?
Financial institutions that are eligible to provide MUDRA Loans:
- Public and Private Sector Banks
- Non-banking Financial Companies (NBFCs)
- Regional Rural Banks (RRBs)
- Small Finance Banks (SFBs)
- Micro Finance Institutions (MFIs)
Read More: Detailed Mudra Loan Eligibility
Documents required
- Self-written business Plan
- Duly filled application form for specific category, Shishu form to be separate as compared to Kishor and Tarun loan category
- 2 recent Passport-sized photographs of the applicant and co-applicant, if applicable
- Proof of Identity (Aadhar card / Voter’s ID card / Passport / Driving License, etc.)
- Proof of Residence (Aadhar Card / Voter’s ID card / Passport / Telephone Bill / Bank Statement, etc.)
- Income Proof with financials, such as ITR, Sales Tax return, Licenses, Registrations, etc, if any
- Proof of belonging to a special category, such as SC, ST, OBC, Minority, etc. (if applicable)
- Business address and tenure proof, if applicable
MUDRA Card
Mudra card is a debit card that is issued to the loan applicants who wish to apply for Mudra loan. When a loan applicant applies for this loan and if it gets approved, the bank or the lender opens a Mudra loan account and issues the card along with it. The amount is disbursed into the Mudra account so the applicant can debit the amount from their Mudra account. This process also helps in keeping a credit history for the borrower who has applied for this scheme.
FAQs
Q. How to Apply for Mudra Loan?
Ans. 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 loan and submit the filled downloaded form and complete the bank formalities. It is advisable to start with the bank where you already have an account to get the approval easily.
Q. Which banks offer Mudra Loan?
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 are eligible to offer Mudra loans, as per sole permission and directions from the RBI. Since the interest rates and eligibility criteria vary slightly from one bank to another, so you must check and compare before applying for Mudra loan.
Also Read: Small Business Loan
Q. What is the repayment tenure of the Mudra Loan?
Ans. The repayment tenure of Mudra loan is maximum up to 5 years
Q. What is the loan amount offered under Mudra Loan?
Ans. The minimum loan amount offered under Mudra loan is Rs. 50,000, whereas the maximum loan amount sanctioned is up to Rs. 10 lakh.
Q. Can people from metropolitan cities apply for a Mudra Loan?
Ans. Absolutely! All sole proprietors and the owners of Micro, Small and Medium Enterprises (MSMEs) engaged in non-agricultural services and activities across the country, including metro, urban, semi-urban and rural areas can apply for a Mudra loan.
Q. Is there any special Mudra loan scheme for women?
Ans. Yes there is. United Mahila Udhyami Yojana is a part of the Mudra scheme. 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. I want to start my own business. Can MUDRA help me?
Ans. Definitely! MUDRA offers loans to start-ups in the manufacturing, trading and other non-agricultural sectors. To get a Mudra loan for your start up, you need to present your business plan along with the duly filled application form. Thousands of budding entrepreneurs have already availed Mudra loans to realise their dreams.
Q. I own a bakery business and want to expand it. Can I get a Mudra Loan?
Ans. Yes, you can avail assistance under the “Shishu” or “Kishor” category of Micro Credit Scheme of MUDRA to expand your business. Contact your nearest Micro Finance Institution (MFI) to know the application procedure and eligibility criteria.
Q. Is there any reservation system in place for Mudra loans?
Ans. No. Any micro enterprise or sole proprietor can apply for a Mudra loan. Anyone who is eligible for a Mudra loan and completes the application formalities properly can get the loan. Hence, there is no reservation system applicable for a Mudra loan.
Q. What is a Mudra Card?
Ans. The Mudra Card, is a card that offers cash credit services and can also be used overdraft by small business owners. It can also act as a debit card that owners can swipe at Points of Sale (PoS) with merchants or use to withdraw cash from an ATM. The Mudra card works on the RuPay platform, as well.
Q. What is the recent initiative by Government of India for Mudra scheme?
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
