What is MUDRA Yojana?
Micro Units Development and Refinance Agency (which is MUDRA full form) Loan scheme under PMMY or Pradhan Mantri Mudra Yojana is an initiative by Government of India that offers loans to individuals, SMEs and MSMEs. Launched in 2015 and announced by Prime Minister Narendra Modi, MUDRA Yojana is offered under 3 loan schemes named as Shishu, Kishor, and Tarun. These are collateral or security free loans provided by banks and NBFs with the repayment tenure from 12 months to 5 years with flexible EMIs.
Table of Contents
Features of Mudra Loan
|Interest Rate||Varies from bank to bank, depends on business requirements|
|Minimum Loan Amount||No limit|
|Maximum Loan Amount||Up to Rs. 10 lakh|
|Repayment Tenure||From 3 years to 5 years|
|Types of Mudra Scheme||Shishu, Kishor and Tarun|
Mudra scheme can be availed by individuals, SMEs, MSMEs, enterprises or businesses engaged in Manufacturing, Trading and Services Sectors, only.
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Mudra Loan Details
Products offered under Mudra Loan
Products offered under Pradhan Mantri Loan Yojana are classified under 3 loan schemes named as 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) can be availed in Mudra Shishu Loan scheme
- KISHOR Loan: Loans from Rs. 50,001 to Rs. 5,00,000 (For buying equipment/machinery, raw materials, business expansion for existing enterprises) are available in Kishor Loan Scheme
- TARUN Loan: Loans from Rs. 500,001 to Rs. 10,00,000 (For established businesses and enterprises) under Tarun Loan Scheme
Mudra Loan Documents required
- Self-written business Plan
- Duly filled application with 2 recent Passport-sized photographs
- KYC documents of Applicant and Co-applicants: Passport, Voter’s ID card, Aadhar Card, Drivig 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 are similar in the case of Shishu and Kishor loan scheme, whereas is separate for Tarun loan scheme.
Benefits of Mudra Loan
- Mudra loans are majorly offered to shopkeepers, traders, vendors, and MSMEs engaged in manufacturing, trading and service sector activities
- Mudra scheme is covered under Credit Guarantee Schemes from Govt. of India
- Availed loan amount can also be used as term loans and overdraft facilities
- All Non-farm enterprises, i.e. small or micro firms engaged in the income generating activities can avail Mudra loan
- Mudra loan can also be availed by people belonging to SC/ST category at concessional interest rates.
- Mudra scheme can be availed via Mudra cards, as well
Purpose of Mudra scheme under PMMY
List of businesses that are covered under Mudra scheme to perform income generating activities are mentioned below.
- Commercial Vehicle: Mudra finance for machinery and equipment can be used to purchase of 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 respective sector
- 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 centres, food & agro-processing units, poultry farming, pisciculture, bee keeping, sorting, livestock-rearing, grading, aggregation agro industries, diary, fishery, etc.
Also Read: How to Get Collateral Free Business Loans?
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Mudra Loan Bank List
Financial institutions that offer PM MUDRA Loan, directed by RBI are as follows:
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How to Apply for Mudra Loans?
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 filled downloaded form and complete the bank formalities.
What is Mudra Loan for Women?
Mudra Yojana under PMMY encourages women entrepreneurship and for that Govt. of India has asked various financial institutions, including banks & Micro Finance Institutions (MFIs) to consider extending facilities, such as reducing interest rates on their loan for women borrowers. Currently, Mudra extends a reduction 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 Indian citizens.
What is 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 Bank. This process also helps in keeping a credit history for the borrower who has applied for this scheme. The details and information regarding Mudra card can be availed online from PMMY’s official website.
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Pradhan Mantri Mudra Loan Helpline Complain Number
|S.N||National Toll-Free Number|
Also, Check State Toll-Free Numbers for Pradhan Mantri Mudra Loan Yojana, Click here
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 a loan approval by banks in case of Mudra Yojana under PMMY.
Q. Is security/collateral required for Pradhan Mantri Mudra Loan?
Ans. No, Collateral or security is not required by banks 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 offers Pradhan Mantri Mudra Loan, 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 a Mudra loan.
Q. Can I get a Mudra business loan under Mudra Yojana for a restaurant startup?
Ans. Yes, you can apply for Mudra loan to start a new business, if your loan requirement is not more than Rs. 10 lakh. The interest rate shall depend on the applicant’s profile, business requirements, repayment tenure, etc.
Q. Is there any special Mudra loan scheme for women?
Ans. Yes there is. United Mahila Udhyami Yojana is a part of the Mudra loan 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. How has the Pradhan Mantri loan scheme for ladies benefitted the women of India?
Ans. Mudra Yojana has helped millions of customers to start their own business at affordable interest rates and promoted the MSME sector by creating employment opportunities.
Q. How do financial institutions support Pradhan Mantri Mudra Yojana for ladies implementation?
Ans. Mudra loans are offered with the help of several financial institutions like private and public sector banks, Regional Rural Banks, Micro Finance Institutions, etc. as per the directions of RBI.
Q. What are the key features of the Pradhan Mantri Loan Yojana for women?
Ans. The key features of Mudra loan for female entrepreneurs are as follows:
- Mudra Yojana is categorised into 3 loan schemes, named as Shishu, Kishor and Tarun
- No minimum loan amount criteria
- Maximum loan amount up to Rs. 10 lakh
- Collateral Free Loan
- Repayment Tenure is up to 5 years
Q. Can I get Mudra loan for new business?
Ans. Definitely! Banks offers Mudra loans to start-ups in the manufacturing, trading and other non-agricultural sectors. To get Mudra loans 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. We own a bakery business and want to expand it. Can we get Mudra Loans?
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.
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 Mudra loan under three loan schemes named as Shishu, Kishor and Tarun, wherein there is no minimum limit to borrow and maximum loan amount is up to Rs. 10 lakh.
Q. I intend to work on franchisee model and open an ice cream parlour. Can mudra help me?
Ans. Of course, you can apply for business loan under Mudra loan at attractive interest rates with no processing fee and no collateral to be submitted.
Q. What does the Mudra scheme for women contain?
Ans. Under the Mudra loan scheme for women, the maximum loan amount for aspiring women entrepreneurs to start a new business is offered up to Rs. 10 lakh with no collateral to be submitted along with the Nil processing fee.
Q. I have graduated recently. I want to start my own business. Can MUDRA help me?
Ans. If your age is above 18 years then you can apply for the Shishu category under Mudra loan wherein there is no minimum loan limit and maximum loan amount is up to Rs. 50,000.
Q. I have a diploma in food processing technology. I want to start my own unit. Please guide me.
Ans. If your loan amount limit is not above Rs. 10 lakh, then you can apply for business loan under Mudra loan at attractive interest rates. The criteria shall be defined by the respective bank.
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 used to start your own boutique. You can visit the nearest bank that offers Mudra loan with all the required documents to apply for business loan. You can also visit the official website to download the application form.