Since the day Pradhan Mantri MUDRA Yojana (PMMY) or MUDRA (Micro Units Development Refinance Agency) Bank has been launched, most of the people are confused on the various aspects of the scheme and surprisingly they are confusing others as well. There are lot of queries that comes up quite often as to who are eligible to take benefit of this scheme, which financial institutions are offering this yojana, what types of loans are provided under the scheme and so on. You will find answers to all these questions and lot more in this article.
Eligibility conditions for getting loans under Mudra Yojana
Any Indian citizen who is having a business plan or an extension plan related to the income generating activities of a non-farm sector like manufacturing, processing, trading or service sector and his total credit need related this business or extension plan is limited to Rs. 10 lakh is eligible to apply for loan under Mudra Yojana.
Which financial institutions are offering loans under Mudra Yojana?
For the purpose of applying a loan, one can approach Bank, Financial Institution or Non-Banking Financial Companies (NBFC). From there, you can avail collateral free loans under this scheme. At present, loans under Mudra Yojana are offered by 27 public sector banks, 17 private sector banks, 31 regional rural banks (RRBs), 4 co-operative banks, 36 microfinance institutions and 25 non-banking financial institutions. Therefore, there is a wide range of doors you can knock in order to apply and avail loans under MudraYojana.
Types of loans provided under Mudra Yojana
One can avail three different types of loans under Mudra Yojana:
- Shishu Loans – Shishu loans are meant for loans for a maximum amount of Rs. 50,000
- Kishor Loans – Kishor loans are meant for loans amounting above Rs. 50,000 to Rs. 5 lakhs
- Tarun Loans – Loan requirements above Rs. 5 lakhs to Rs. 10 lakhs are covered under Tarun Loans.
As a matter of fact, currently, 60% of the loans sanctioned under Mudra Yojana are given under Shishu Loan category, rest 40% loans are sanctioned either under Kishor loans or Tarun loans category. At present, applications can be downloaded for only Shishu loans under Mudra Yojana.
Rate of interest for Shishu Loans under Mudra Yojana
In order to avail Shishu Loan under Mudra Yojana, an applicant should not be a defaulter for any bank, NBFC or financial institution. The rate of interest on these loans is 1% per month (that is 12% per annum).
Characteristics of Shishu Loans
- There is no collateral security required for availing this loan
- The loan processing fee is nil
- The loan has to be repaid in a maximum period of 5 years
- Working capital loans can be availed through Mudra cards. These Mudra cards are either directly issued by the banks or in association with MFIs.
Documents required for obtaining Shishu Loans under MudraYojana
While applying for Shishu loan under MudraYojana, you need to submit the following documents along with the application form:
- Self attested copy of identity proof (voter ID card, driving license, PAN card, Aadhar card, passport, etc.)
- A copy of proof of residence (recent electricity bill, telephone bill, voter ID card, Aadhar card, passport, duly attested bank statement by the bank official, etc.)
- Passport size 2 photographs of the loan applicant
- The quotation of machinery including other items required to be purchased
- Details of the supplier of the machinery, details of the machinery, price of the machinery (including details and price of other items required to be purchased)
- Identity proof or address of business enterprise (including the copies of relevant licenses or documents or registration certificates)
- Proof of category, if applicable (SC, ST or OBC)
In order to seek help or guidance related to loans under Mudra Yojana, you can approach any of the nearest branches of the banks/ NBFCs, MFIs offering this scheme. You can also contact the Nodal officers of any regional office of SIDBI. In addition, you can also contact the website of Mudra, www.mudra.org.in and you can also write to help@mudra.org.in.
I hope the details mentioned are sufficient enough for you to clear the initial air related to the Mudra Yojana.
