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.
Table of Contents:
Features of Mudra Loan
|Interest Rate||Varies from bank to bank & depends on business requirements|
|Types of Mudra Schemes||Shishu, Kishor and Tarun|
|Maximum Loan Amount||Up to Rs. 10 lakh|
|Collateral/Security||Not required by banks/NBFCs|
|Repayment Tenure||From 12 months to 5 years|
Mudra scheme can be availed by individuals, MSMEs, startups, large enterprises, retailers, traders, manufacturers, or businesses engaged in Manufacturing, Trading and Services Sectors, only.
Mudra Loan Amount Details
Loan amount offered under Pradhan Mantri Loan Yojana (PMMY) are classified under 3 schemes, named Shishu, Kishor and Tarun. Below mentioned is the loan amount offered under each loan scheme:
- SHISHU Loan: Loans up to Rs. 50,000 (For start-ups and new businesses)
- KISHOR Loan: Loans from Rs. 50,001 to Rs. 5,00,000 (For buying equipment/machinery, raw materials, or business expansion for existing enterprises)
- TARUN Loan: Loans from Rs. 500,001 to Rs. 10,00,000 (For established businesses and enterprises)
Benefits of Mudra Loan
- Mudra loans are majorly offered to individuals, retailers, shopkeepers, traders, vendors, and MSMEs engaged in the manufacturing, trading, and service sectors, only
- Mudra scheme is covered under Credit Guarantee Schemes from Govt. of India
- The borrowed amount can also 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
- Mudra card is a type of debit card that is offered to borrowers that can be used to withdraw loan amounts, as per the business requirements. The loan amount can be withdrawn in portions via Mudra card from the total sanctioned amount
Purpose of Mudra Scheme under PMMY
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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- 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
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.
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.
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 2020-2021
|No. Of PMMY Loans Sanctioned||7669969*|
|Amount Sanctioned||Rs. 44125.74 crore*|
|Amount Disbursed||Rs. 38668.03 crore*|
Note: Source is https://www.mudra.org.in/ and * numbers depicted is provincial data
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 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 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. Can people from metropolitan cities apply for Mudra Loan Scheme?
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 Mudra loans.
Q. Can I get a Mudra business loan under Mudra Yojana for a restaurant startup?
Ans. Yes, you can apply for a Mudra loan to start a new business, if your loan requirement is not more than Rs. 10 lakh. The interest rate shall vary from bank to bank and depend on the applicant’s profile, business requirements, repayment tenure, etc.
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. Can I get a Mudra loan for a new business?
Ans. Definitely! Startups can avail Mudra loans at competitive interest rates with flexible repayment options. Numerous budding entrepreneurs have already availed Mudra loans to start their own businesses.
Q. We own a 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 want to expand my pottery business by adding more variety and designs. What help can I get from Mudra?
Ans. You can apply for a Mudra loan under three loan schemes named Shishu, Kishor, and Tarun at low-interest rates, wherein the maximum loan amount is up to Rs. 10 lakh with the Nil processing fee.
Q. I intend to work on a franchisee model and open an ice cream parlor. Can mudra help me?
Ans. Of course, you can apply for a business loan under Mudra loan at attractive interest rates with no processing fee and no collateral to be submitted.
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.
Loans offered under Mudra Scheme exceeds Rs. 9 lakh crore
June 24, 2021: At G20 Labour and Employment Ministers’ Meeting, Labour Minister Santosh Kumar Gangwar announced that more than Rs 9 lakh crore has already been disbursed, as collateral-free loans under the Mudra scheme. As per the labour minister, approximately 70% of the account holders are women under Pradhan Mantri Mudra Yojana (PMMY). Mudra Yojana was primarily introduced to offer financial support to budding entrepreneurs across the nation.