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Micro Units Development and Refinance Agency (MUDRA) Loan under Pradhan Mantri Mudra Yojana (PMMY) can also be availed by women entrepreneurs at concessional interest rates. Collateral-free business loans offered by Banks/NBFCs under Mudra Yojana are categorised under 3 loan schemes named Shishu, Kishor, and Tarun. Let’s further discuss the Mudra Yojana along with loan details, eligibility, benefits, documents required, etc.
Table of Contents
Features of Mudra Loan
| Nature of Loan | Term Loan, Working Capital Loan & Overdraft Facility |
| Types of Mudra Schemes | Shishu, Kishor, and Tarun |
| Loan Amount |
|
| Interest Rates | As per the applicant’s profile and business requirements |
| Processing Fees | Nil, or 0.50% of the sanctioned loan amount |
| Collateral/Security | Not required by any lender |
| Repayment Tenure | From 12 months to 5 years |
| Foreclosure Charges | Nil to nominal, as per lender |
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Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs – October 2022
| Bank/NBFCs | Interest Rate | |
| HDFC Bank | 10.00% – 22.50% p.a. | Apply Now |
| FlexiLoans | 1% per month onwards | Apply Now |
| ZipLoan | 1% – 1.5% per month (Flat ROI) | |
| Axis Bank | 14.25% – 18.50% p.a. | Apply Now |
| IDFC First Bank | 14.50% onwards | |
| Kotak Mahindra Bank | 16% – 19.99% | Apply Now |
| Fullerton Finance | 17% – 21% | |
| Bajaj Finserv | 17% p.a. onwards | Apply Now |
| RBL Bank | 17.50% – 25% p.a. | Apply Now |
| ICICI Bank | 17% onwards | |
| Indifi Finance | 1.5% per month onwards | Apply Now |
| Lendingkart Finance | 1.5% – 2% per month | Apply Now |
| Tata Capital Finance | 19% p.a. onwards | Apply Now |
| NeoGrowth Finance | 19% – 24% p.a. | Apply Now |
| Hero FinCorp | Up to 26% p.a. | Apply Now |
Note: Business loan interest rates are updated as on October 2022.
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Eligible Entities
Loans under the Mudra scheme can be availed by the following business entities engaged only in the Services, Manufacturing, and Trading sectors:
- Individuals, Self-employed Professionals & Startups
- Micro, Small, and Medium Enterprises (MSMEs)
- Shopkeepers, street vendors, retailers, traders, small manufacturers, and artisans
- Sole Proprietorships, Partnership firms, Limited Liability Partnerships (LLPs), and other business entities
Benefits of Mudra Loan
- Collateral-free loans – No collateral or security is required by the banks/NBFCs from the borrower
- Low-interest rates with Nil to nominal processing fees
- Concessional interest rates for women entrepreneurs
- Loans 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 income-generating activities can avail Mudra loans
- Mudra loans can also be availed by people belonging to SC/ ST/ Minority category at special interest rates
How to Apply
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.
Secondly, you can also apply online on the bank’s official website by submitting the duly filled application form along with the required documents as specified by the lender. Once the lender is satisfied with the submitted documents, then shall approve the loan and you may receive the loan amount in your mentioned bank account within 7-10 working days.
If in case you want an instant business loan or loan amount of more than Rs. 10 lakh, then you can apply here and choose the best available loan product, as per your business requirements at the lowest interest rate.
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Documents required
- 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/NBFC
Note: The Mudra loan application form to be filled and submitted is separate in the case of Shishu, whereas similar in the case of Kishor and Tarun loan schemes.
List of Businesses covered under Mudra Scheme
List of businesses that are covered under the Mudra scheme to perform income-generating activities is mentioned below:
- Commercial Vehicle: Mudra finance for Machinery/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, 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 the 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.
Banks/NBFCs offer Mudra loans to individuals, startups, MSMEs, entrepreneurs, or businesses engaged only in the Services, Trading or Manufacturing sectors.
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:
Also Know: Which bank or NBFCs in India offer the best Mudra loan in terms of low interest rates?
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Also Know: Details on SBI Mudra Loan & How to Apply for SBI e Mudra Loan
Mudra Loans for Women Entrepreneurs
Mudra Yojana under PMMY encourages women’s entrepreneurship and for that Private and Public Sector Banks, NBFCs & Micro Finance Institutions (MFIs) offer collateral-free business loans at reduced or concessional interest rates. The maximum loan amount offered under Mudra Yojana for women entrepreneurs is up to Rs. 10 lakh with a repayment tenure of up to 5 years. The Mudra loan eligibility for women remains the same, as stated for individuals and enterprises. Nil to Nominal processing fee and foreclosure fees is charged on the sanctioned loan amount for women entrepreneurs.
Mudra Card
Mudra card is a type of debit card that is issued to the borrowers of Mudra loans to meet their day-to-day business 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.
Helpline/Customer Care Numbers
S.N | National Toll-Free Numbers |
| 1 | 1800-180-1111 |
| 2 | 1800-11-0001 |
Also, To check State Toll-Free Numbers for Pradhan Mantri Mudra Loan Yojana, Click here
Achievements under PMMY (FY 2022-2023)
| Financial Year | 2022-2023 |
| No. of PMMY Loans Sanctioned | 18734935* |
| Amount Sanctioned | Rs. 133150.73 crore* |
| Amount Disbursed | Rs. 311754.47 crore* |
Source: https://www.mudra.org.in/
*Numbers depicted is provisional data (Last updated on Sep 2022)
Achievements under PMMY (FY 2021-2022)
| Financial Year | 2021-2022 |
| No. of PMMY Loans Sanctioned | 53795526* |
| Amount Sanctioned | Rs. 339110.35 crore* |
| Amount Disbursed | Rs. 331402.20 crore* |
Source: https://www.mudra.org.in/
*Numbers depicted is provisional data (Last updated on March 2022)
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FAQs
Q. How much time does it take for Mudra Finance to get approved?
Ans. Usually, it takes around 7-10 working days for Mudra loan approval by private/public sector banks and NBFCs.
Q. Do I need to submit any security/collateral with the bank to avail loan under Pradhan Mantri Mudra Yojana?
Ans. No, you are not required to submit any collateral or security with any financial institution to avail Mudra loan.
Q. Is ITR compulsory for Mudra Finance?
Ans. For existing businesses and salaried people, last year’s ITR is required 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 official website and checking via its e-mudra loan application status section.
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.
Also Know: What are the best financial institutions for a woman to receive a small business loan?
Q. We own bakery business and want to expand it. Can we avail Mudra Loan?
Ans. Yes, you can avail loan under the “Kishor” or ”Tarun” category of an amount up to Rs. 10 lakh to expand your business. Contact your nearest Bank and NBFC 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 and apply online.