Everything about Pradhan Mantri Mudra Yojana Loan Scheme
Seeking a detailed article on Pradhan Mantri Mudra Yojana how to apply? Well, you have arrived in the correct place to seek answers. Pradhan Mantri Mudra Yojana was launched back on 8th April 2015, by the honorable Prime Minister. The Mudra Mission targets achieving financial protection and economic prosperity. It works towards creating a valuable and sustainable entrepreneurial culture in collaboration with other institutions. The Mudra yojana offers loans up to 10 lakhs to establishments like non-farm micro-enterprises. The loans under the Pradhan Mantri Mudra Yojana are popularly known as ‘Mudra Loans’.
The vision of the Pradhan Mantri Mudra Yojana is to enhance the social and economic development of the non-farm establishments by rendering financial support. The Mudra Loans are offered by almost all the commercial banks of India. One can approach any of the loan providers mentioned above or can also apply on an online portal – www.udyamimitra.in as per convenience. However, to know more about the How to apply Pradhan Mantri Mudra Yojana, continue reading. The article ahead elaborates on every minute detail about the yojana. Also, you get a step-by-step guide on how to get a mudra yojana loan.
How to apply for the Pradhan Mantri Mudra Yojana?
You need to follow some easy steps to apply for Mudra loans under the Pradhan Mantri Mudra Yojana. To apply you need follow the below-jotted steps:-
- Step 1:-First and foremost, you require some essential Mudra loan documents to apply for the Mudra loan.
- Identity proof like Aadhar card, PAN card, Voter ID card, Driving License. etc.
- Business proof like the business registration documents for the analysis of Mudra loan eligibility.
- Address proof like telephone bill, water bill, electricity bill, gas bill, etc.
- Step 2:-Pick a financial institution of your choice and apply for a Mudra loan. Most of the commercial banks of India, as well as financial organizations, offer Mudra loans.
- Step 3:-Fill the request form to apply for the loan. Every applicant requires filling up business and personal details in the application form to apply for the Mudra loan. The applicants also need to ascertain the loan amount before applying for the Mudra loan scheme.
What is Pradhan Mantri Mudra Yojana?
The Pradhan Mantri Mudra Yojana is an initiative by the Indian government that offers MSMEs, individuals, and SMEs. The full form of MUDRA is, Micro Units Development and Refinance Agency, which, in turn, indicates the objective of the initiative. The Pradhan Mantri Mudra Yojana for startups is offered under three loan schemes, namely Shishu, Tarun, and Kishor. The maximum loan that one can apply for is 10 lakhs. Though, there is no minimum amount. To avail of Different Types of Mudra Loan, no security or collateral is asked by the financial institutions or banks.
The objectives of the Pradhan Mantri Mudra Yojana
Some of the prominent objectives of the Pradhan Mantri Mudra Yojana are listed below:-
- To lay down guidelines of the policy for rendering funding micro-enterprises and small businesses.
- To render help to small trades such that they develop and further grow.
- To offer funding preferences to Schedule Castes and Schedule Tribes.
- To render monetary assistance to small income groups and businesses such that, they can expand and build their startup.
- Having various Microfinance Institutions registered and regulating.
- To create an eased out access for the unbanked and help them lower the cost of their funding.
- To regulate the several Microfinance Institutions that deal with services, trades, and manufacturing.
What are the different Mudra Loan Types?
There are 3 kinds of Mudra loan types that you can apply for:-
- Shishu: –The Shishu Yojana covers up to INR 50,000 for businesses in the early stages. This yojana is a specific Pradhan Mantri Mudra Yojana for startups. Shishu deals with micro and small businesses or individuals who require funding to start something on a smaller level. The yojana works towards allowing the unfunded trade ideas and bring a business idea into a formal monetary system.
- Kishor: –The Kishor Yojana covers up to INR 5 lakhs for enterprises that require additional funds. It works towards giving a financial push to businesses that seek extended monetary help to expand operations. It helps businesses to prosper that lack funding but are full of potential to make it huge in the future.
- Tarun: –The Tarun Yojana covers up to INR 10 lakhs for the already establishes businesses. The Tarun Yojana offers a large sum for already established businesses. The loan allows trades to expand to another level. Also, these businesses require fitting some specific eligibility criteria.
Who is eligible for a Mudra loan?
The Indian government has launched Pradhan Mantri Mudra Yojana to offer Mudra Loans to small business owners and micro companies to meet their monetary requirements and operating costs. Any individual who runs a micro business is eligible to apply for the Mudra loans. However, there are certain criteria for a person to apply for the Mudra loan. Let us take a look at them:-
- To apply for the Mudra loan, you need to be a minimum of 18 and a maximum of 65 years of age. An individual falling under the mentioned age bar is eligible to apply for the Mudra loans.
- The applicants must be engaged in associated agricultural services since April 1, 2016.
- Any non-farm economic trade, services, and manufacturing businesses can apply for the loan.
- The applicant must have a 10 lakh or lesser loan requirement.
Is Mudra Yojana for Women?
The Pradhan Mantri Mudra Yojana supports female applicants. The government has suggested several banks and financial institutes to consider extending extra facilities for women entrepreneurs. Lower Mudra loan interest rate is offered to women entrepreneurs. Presently, Micro Financial Institutions (MFIs) and NBFCs extend a 25 BPS (basic points) reduction to female applicants.
What are Mudra Loan Documents?
Once you know the answer to Pradhan Mantri Mudra Yojana how to apply, all you need is, to compile all the necessary documents together and wait for approval. The documents that you require to apply for a Mudra Loan are listed below:-
- A detailed business plan which is self-written
- KYC documents of the applicant or applicants in case there are more than one.
- Identity proof – PAN card, Aadhar card, Voter ID card, Driving license, Passport.
- Proof of business tenure and business address, in case it is applicable.
- Registration documents, Certificates or Licenses, if any.
- Mention of belonging to any special category like SC, ST, OBC, or any other minority.
- Passport size photos of the applicant/applicants
- Proof of income with financials like registrations, Sales Tax Return, licenses, ITR, etc.
- Proof of residence – Aadhar Card, Passport, Bank Statement, Voter ID Card, Telephone Bill, etc.
- A duly filled application for the specific Mudra loan category that you plan to apply for.
What is Mudra Loan Interest Rate?
The Mudra loan interest rate in 2020 is 8.05%. The processing fee varies from nil to 0.5%. The mudra loans render a maximum of 10 lakhs loan for 5 years.
The interest rate starts at 8.05% and when applying for the loan you can compare the rates of various options and apply as per your convenience. Also, no collateral or security is demanded to get the Mudra loan.
Let us have a look at the interest rate offered by some of the financial institutes:-
- HDFC Bank: –The interest rate offered by HDFC bank varies between 10.99% to 20.70%, and the processing fee is up to 1.5%.
- Oriental Bank of Commerce: –The interest rate offered by Oriental Bank of Commerce varies between 10.65% to 11.65%, and the processing fee is up to 0.5%.
- ICICI Bank: –The interest rate offered by ICICI bank varies between 10.99% to 17.99%, and the processing fee is up to 2.25%.
Is Pradhan Mantri Mudra Yojana for Startups?
Absolutely! The Pradhan Mantri Mudra Yojana renders financial aid to startups.
The Government of India is a very progressive one when it comes to supporting startups. It takes initiatives of funding schemes and granting loans to entrepreneurs and startups in the nation. Often, entrepreneurs and small businesses require funding for their unique ideas. Owing to the same objective, the Indian Government came up with the Pradhan Mantri Mudra Yojana. It offers Mudra loans to small businesses, startups, micro agencies, etc., who require funding for their growth and expansion.
To apply for a Mudra loan, startups must first figure out the category they belong to. Once they categorize their requirements, they can apply for the Mudra loan. Once the startup decides a category, the following step is to decide which financial institutions the loan should be availed of. Once decided, the applicant can apply for the loan from MFIs, Banks, or NBFCs.
Pradhan Mantri Mudra Yojana helpline number
The Pradhan Mantri Mudra Yojana customer care number is 1800-180-1111. There is another alternate Pradhan Mantri Mudra Yojana customer helpline number– 1800-11-0001. These are both toll-free numbers, and you can contact customer care for any queries.
The following table lists the state level helpline numbers:-
|Andaman & Nicobar Island||18003454545|
|Dadra & Nagar Haveli||18002338944|
|Daman & Diu||18002338944|
|Jammu & Kashmir||18001807087|
What are the specific segments that the Pradhan Mantri Mudra Yojana emphasizes?
The Finance Minister emphasizes helping women, minorities, tribals, backward classes, and Dalits via the Mudra loans under the Pradhan Mantri Mudra Yojana. The yojana targets to render monetary help to those who have otherwise been in the lack of adequate opportunity of receiving funds.
What is Mudra Card?
Mudra Card is issued to the applicants who apply for the Mudra loan, and their loan gets approved. It is a debit card for convenient use. Once the loan is approved, the financial institution opens a Mudra loan account in the name of the applicant and issues a Mudra card with it. The amount of the loan is issued in the Mudra account of the applicant. Additionally, the process helps to track the applicant’s credit history.
Purpose of the Pradhan Mantri Mudra Yojana
One can avail of the Mudra loan under the Pradhan Mantri Mudra Yojana for several income-generating activities listed below:-
- Commercial Vehicle:-buying any vehicle for commercial transportation use like tractors, taxis, 3-wheelers, auto-rickshaws, tillers, e-rickshaws, goods carrier vehicles, etc.
- Food and Textile industry activities: –activities involved in the textile and food industry. Service sector activities: – for startup businesses like salons, tailoring stores, repair shops, photocopying shops, gyms, medicine shops, dry-cleaning stores, etc.
- Equipment fund scheme for small units: –a loan of maximum INR 10 lakhs.
- Service sector activities: –for startup businesses like salons, tailoring stores, repair shops, photocopying shops, gyms, medicine shops, dry-cleaning stores, etc.
- Trading activities for shopkeepers and traders: –setting up service enterprise, trading activities, and non-farm activities that generate income.
- Agriculture allied activities: –activities associated with agriculture businesses, poultry, grading, agro-processing units, bee-keeping, livestock-rearing, fishing, sorting, pisciculture, and agro-clinics.
Benefits of the Pradhan Mantri Mudra Yojana’s Mudra Loan
Several benefits of the Mudra loans are listed below. Let us take a look:
- Mudra loans are offered to render monetary help to vendors, shopkeepers, businessmen, traders, etc. for trading, and service sector tasks.
- The Mudra loans are offered by the Government of India under Credit Guarantee Schemes.
- Debit cards called Mudra Cards are offered for easy usage.
- Non-firm businesses, i.e., micro firms can avail of Mudra loans and engage in income generation.
- Women are given lower interest rates.
- The loan amount can be used as overdraft facilities and term loans.
The Pradhan Mantri Mudra Yojana’s Mudra Loan is designed to help micro-businesses and individuals who are otherwise not given adequate funding to grow in life. The government of India has begun this yojana to help the people of the country to economically grow and prosper. Since 2015, the yojana has offered loans to numerous applicants.