There are a large number of micro, small, medium, and large companies in India. And, this number is growing in leaps and bounds every year. These companies can contribute incredibly to the nation’s economy. However, many of these halted their operations due to a lack of funds. To help these enterprises with funds, the central government has launched a scheme called the Pradhan Mantri MUDRA Yojana (PMMY). Under this scheme, enterprises can avail of business loans in the form of mudra loans ranging from Rs.50000 to Rs.10 lakh. In this post, let us take a look at Mudra loan yojana and how to apply for MUDRA loan online.
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Pradhan Mantri MUDRA Yojana (PMMY)
The Hon’ble Prime Minister announced a scheme called Pradhan Mantri MUDRA Yojana (PMMY) on April 8, 2015. The scheme offers loans up to 10 lakh to non-corporate, non-farm small/micro-enterprises. Under the PMMY scheme, these loans are known as MUDRA loans.
What is MUDRA Loan?
The PMMY scheme offers loans amount up to Rs.10 lakh for individuals and MSMEs to start their new businesses or for existing businesses. These loans are known as MUDRA loans and are offered without submitting any collateral or security. MUDRA stands for Micro-Units Development and Refinance Agency Ltd.
MUDRA loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs, NBFCs and other eligible financial intermediaries as notified by MUDRA Ltd. Loans under the MUDRA loan scheme have a repayment tenure from 12 months to 5 years with flexible EMIs. You can approach any of the institutions mentioned above. Or MUDRA loan online apply on the Udaymimitra portal. Click here for MUDRA loan apply online on the Udaymimitra portal.
Features of MUDRA Loan Yojana
This loan can be availed by individuals, MSMEs, enterprises, or businesses engaged in manufacturing, trading, and services sectors in rural and urban areas.
| Interest for MUDRA Loan | Varies from bank to bank and depends on business requirements |
| Minimum Loan Amount | No minimum limit |
| Maximum Loan Amount | Up to Rs.10 lakh |
| Types of Loan | Shishu, Kishor, and Tarun |
| Loan Amount under Shishu | Up to Rs.50000 |
| Loan Amount under Kishor | Rs.50001 to Rs.5 lakh |
| Loan Amount under Tarun | Rs.500001 to Rs.10 lakh |
| Collateral/Security | Not required |
| Processing Charges | Nil |
| Repayment Tenure | 12 months to 5 years |
| Age Criteria | Minimum age 18 years and Maximum age 65 years |
MUDRA Loan Details
Types of MUDRA Loan
Under the aegis of PMMY, MUDRA loans are offered under three categories:
1. Shishu Loan Scheme: Loans up to Rs.50000/- for start-ups and new businesses.
2. Kishor Loan Scheme: Loans from Rs.50001 to Rs.5 lakh for buying equipment, machinery, raw materials, a business expansion for existing enterprises.
3. Tarun Loan Scheme: Loans from Rs.500001/- to Rs.10 lakh for established businesses and enterprises.
To increase the confidence of the aspiring youth to become first-generation entrepreneurs. It is ensured that more focus is given to Shishu category units and then Kishore and Tarun categories.
Under the MUDRA loan scheme, you can avail of business loans ranging from Rs.50000 to Rs.10 lakh based on the Shishu, Kishore, and Tarun categories.
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Purpose of MUDRA Loans
MUDRA loans can be taken for a variety of purposes which result in generating income and creating employment. Following are the main purposes for which these loans are extended.
1. Business loan for traders, shopkeepers, vendors, and other activities in the service sector.
2. Working capital loans through MUDRA cards.
3. Equipment finance scheme for small units (Micro units).
4. Loans for transport vehicles (for commercial use only).
5. People involved in Agri-allied non-farm income-generating activities such as bee-keeping, pisciculture, poultry farming, etc. can apply for Mudra loan.
6. Loans for tractors, tillers as well as two-wheelers for commercial activities only.
Activities covered under MUDRA Loans
Given below is an illustrative list of activities that can be covered under this loan:
1. Transport vehicles used for transportation of goods and passengers.
2. Community, social, and personal service activities.
3. Food products sector.
4. Textile products sector and activity.
5. Business loans for traders and shopkeepers.
6. Equipment finance scheme for small enterprise units.
7. Activities related to agriculture.
What is the eligibility for MUDRA Loan?
Any Indian citizen who has a business plan for manufacturing or trading or service sector activities in rural and urban India. MUDRA loans can be availed from any participating banks, non-banking financial institutions (NBFCs), or microfinance institutions (MFIs).
To fulfill the eligibility for MUDRA loan scheme, you should be:
1. An individual between 18 to 65 years of age
2. An MSME
3. A shopkeeper
4. Trader
5. Small manufacturer
6. Business owner
7. A startup businessman
8. Small-scale industrialist
9. Artisan
10. An individual occupied in agricultural activities.
Note: The applicant should not be a defaulter to any bank or financial institution. He/she should also have a satisfactory credit track record for availing the loan.
What is MUDRA Loan Interest Rate?
MUDRA loan rate of interest varies from bank to bank. MUDRA loan interest rate depends on business requirements and the profile of the applicant.
There are several participating banks, NBFCs, and MFIs offering this loan. The participating banks wishing to avail of refinance from MUDRA will have to peg their interest rates, as advised by MUDRA Ltd., from time to time.
MUDRA loan rate of interest is to be charged as per the policy decision of the lender. However, the MUDRA loan rate of interest charged to the borrowers shall be reasonable. MUDRA loan interest rate is decided after scrutinizing the profile of the applicant and business requirements.
MUDRA Loan Documents
The MUDRA loans documents can be listed as follows:
1. Application Form: Duly filled application form as per your loan category.
2. Proof of Identity: Passport, Aadhaar card, Voter’s ID card, PAN card, Driving license, etc.
3. Proof of Address: Passport, Voter’s ID card, Aadhaar card, Utility bills (electricity bill, telephone bill, and water bill), etc.
4. Photographs: Two passport-sized photographs.
5. Caste Certificate: If applicable, Proof of special category, such as SC, ST, OBC, Minority, etc.
6. Proof of business address.
7. Other Documents: Quotation of the items which are to be bought and used for the business.
Note: There is a common loan application form for Kishor and Tarun. And a separate application form for Shishu.
Benefits of Mudra Loans
1. Loans are given to individuals, traders, shopkeepers, vendors, artisans, and MSMEs engaged in the trading, manufacturing, and service sectors.
2. These loans can be taken for small amounts at an affordable rate of interest.
3. Under the Mudra scheme, the borrower’s credit guarantee is taken by the Government of India.
4. You can use the loan amount as term loans, working capital loans, and overdraft facilities.
5. Small or micro-enterprises engaged in income-generating activities can this loan.
6. Women borrowers can avail of the loan at concessional interest rates.
7. The people belonging to SC & ST category can avail of this loan at discounted interest rates.
8. MUDRA card is offered to borrowers. This card can be used to withdraw loan amounts, as per the business requirements. A Mudra card is a type of debit card.
9. The tenure of the loan repayment can extend up to seven years.
10. There is no need for collateral or security to avail of this scheme.
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How to MUDRA loan apply?
MUDRA loan process:
1. Keep all the necessary documents ready. You need to have the main documents with you to avail of this loan. These documents include ID proof, address proof, and business proof.
2. Next you need to approach a lender who is enrolled under the MUDRA scheme. Just fill-up the loan application form.
3. Submit the duly filled loan application form along with the necessary documents.
4. This is “MUDRA loan how to apply”.
MUDRA Loan online apply
You can avail this loan under Pradhan Mantri Mudra Yojana (PMMY) from the nearby branch office of a bank, NBFC, MFIs, etc. Now you can also MUDRA loan apply online on the Udyamimitra portal. Click here for MUDRA loan online apply on the Udyamimitra portal.
Note: MUDRA has not appointed any agents or middlemen for availing of loans. Therefore, you are advised to keep away from persons posing as middlemen or agents of the MUDRA scheme or PMMY scheme.
MUDRA Loan Bank List
Following are the lending institutions that offer MUDRA loans:
1. Public Sector Banks
2. Private Sector Banks
3. Regional Rural Banks (RRBs)
4. Small Finance Banks (SFBs)
5. Cooperative Banks
6. Non-banking Financial Companies (NBFCs)
7. Micro Finance Institutions (MFIs)
What type of loan is Mudra Loan?
MUDRA is an NBFC supporting development of the micro-enterprise sector in rural and urban areas. It provides refinance support to participating banks, MFIs, and NBFCs for lending to micro units a loan of up to 10 lakh. It provides loans to micro-business under the scheme of PMMY yojana.
MUDRA Loan Subsidy
There is no subsidy for the loan given under Pradhan Mantri MUDRA Yojana (PMMY). However, if your loan proposal is linked to a Government scheme that is eligible for the capital subsidy, it will be eligible under PMMY also.
How get MUDRA loan?
Keep the necessary documents ready with you. You need to have the main documents such as ID proof, address proof, and business proof. Visit a lender who is enrolled under the MUDRA scheme. Fill up the loan application form and submit it along with the necessary documents. You can also MUDRA loan apply online on the Udyamimitra portal.
Final Thoughts
MUDRA is a refinancing institution. It does not directly give loans to the micro entrepreneurs / individuals. You can avail the loan under PMMY scheme from participating banks, NBFCs, MFIs etc. Now you can MUDRA loan online apply on Udyamimitra portal.
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