Pradhan Mantri Mudra Yojana
MUDRA’ is a scheme that comes under the Pradhan Mantri Mudra Yojana (PMMY) launched by the Prime Minister of our country, Mr Narendra Modi. Established on 8th April 2015, the Pradhan Mantri MUDRA Yojana is an effort to assist micro, small and medium businesses. MUDRA stands for Micro-Units Development and Refinance Agency Ltd. The main objective of this government scheme is to ‘fund the unfunded.
Pradhan Mantri Mudra Yojana shortly called PMMY. Here Mudra stands for Micro-Units Development and Refinance Agency Ltd. This Mudra is the new institution established by Indian Government to provide funds for non-farm sector, non-corporate and micro or small enterprises
The Indian government has come with loan scheme and named as Pradhan Mantri Mudra Yojana and it is also called as Mudra Loan Yojana. With the help of Mudra bank our PM Narendra modi has launched this scheme. There are so many interesting points to know about the Pradhan Mantri Mudra Loan Yojana like types of loans, Mudra loan online apply and interest rates.
The Pradhan Mantri Mudra Yojana or PMMY is a flagship scheme of the Government of India to extend affordable credit to micro and small enterprises.
Mudra loans are designed to bring enterprises into the formal financial system, or to “fund the unfunded”. Loans under PMMY scheme are available to non-farm micro or small enterprises engaged in income generation through manufacturing, trading and services. Enterprises involved in allied agricultural activities can also apply for Mudra loans.
You need to have a genuine business plan to acquire a MUDRA loan. You cannot obtain a MUDRA loan for your personal requirements like buying a car or bike or even if you are a businessman who is rich.
Pradhan Mantri Mudra Yojana – PMMY has issued 3 types of loans for applicants. The loan types are listed below:
- Shishu: Under the Shishu loan, an applicant can obtain a loan of up to Rs. 50,000. This kind of loan is meant for people who require lesser funds. It is given to those who are just beginning or starting their business and need funds.
- Kishor: Under the Kishor loan, an applicant can get a loan between Rs. 50,000 and Rs. 5 lakhs. This type of loan is suitable for applicants that have already begun their business but need some more money to improve it. It is given to those individuals whose businesses have started but have not yet been established. The interest rate is dependent upon the institution lending the funds. In the Kishor loan, business scheme and the credit part of the person applying for this loan plays a significant role in deciding the rate of interest. The bank also decides the period for repayment.
- Tarun: Under the Tarun loan, an applicant can get a loan of Rs. 5 lakhs to Rs. 10 lakhs. This loan offers the highest loan amount granted to individuals under the MUDRA loan scheme. It is given to those whose businesses are established but they need finance to expand their businesses. Again, the credit history and the scheme play an important role in determining the repayment tenure as well as the interest rate.
Eligibility-
Under this scheme which type of firms can apply?
Any type of firm either it individual or partnership comes under the purview of being NCSBS (non corporate small business segments) can avail of this scheme. This NCSBS can be in urban and rural areas.
- A manufacturing Unit
- An artisan
- A service sector unit
- A food service/food processing unit
- Fruit or vegetable vendor
- A shopkeeper
- Small industrial unit
- A truck operator
- Self-proprietors
- Partnerships
- Micro industries
- Repairing shops
Mudra Bank Loan Yojana Interest rates-
Interest rates won’t be fixed as well as it depends on the type of business and bank. Each bank will have their criteria. The Indian government may give some subsidy on the interest rates but the particular percentage is still not declared. Mudra loan interest rates are between 10% to 18%.
Key Features for Pradhan Mantri Mudra Yojana-
Indian government supports the micro or small business as well as start-ups. Micro-unit development and refinance agency popularly called as Mudra.Pradhan Mantri Mudra Yojana is the refinancing agency and not a direct financial institution.
Mudra is the common platform where financial institutions like RRBs, banks, MFIs, NBFCs will meet the applicants to set up their micro-enterprises.
Shishu : Loans sanctioned under the PMMY scheme up to Rs.50000- Kishore : Loans sanctioned under the PMMY scheme from Rs.50001 up to Rs.5.00 lakh
- Tarun : Loans sanctioned under the PMMY scheme Rs.5,00,001 up to Rs.10.00 lakh
- While there is no minimum loan amount under the Mudra loan scheme, the maximum loan amount that can be taken under the PMMY is Rs.10 lakh.
- Borrowers don’t need to pay processing charges or offer collateral if they avail a Mudra loan
- The interest rate on Mudra loans is determined by the Marginal Cost of Lending Rate or MCLR, which is calculated according to the RBI guidelines
Required documents for Pradhan Mantri Mudra Yojana-
- Identity proof: PAN card, Aadhar card, Voter ID, Passport, driving license
- Address proof: Recent telephone bill, property tax, electricity bill, Voter ID, passport, Aadhar card etc
- Cast certificate
- Copies of registration certificates/ relevant licenses/ other document
- Your company address proof and identity proof
- You need to provide the balance sheet, IT returns and sales tax returns for previous 3 years
- If there is any loan in your business name then you need to provide 2 years projection of your balance sheet
- If you have to purchase any machinery they provide the details of Supplier name, Machinery price, and Machinery details
- Machinery and other items quotations.
- Proof of business address.
MUDRA Loan Repayment Period-- Applicants will receive the loan amount for a time period of five years. While this time, the applicant will pay the bank in instalments. The applicant will not find it difficult to pay the instalments since the interest rates are quite low. Thus, a MUDRA loan enables them to grow and develop their business without adding much stress and hassle to their daily routine and finances.
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