MUDRA Bank or ‘Micro Units Development Refinance Agency ‘was launched on April 10, 2015, by Hon’ble PM Narendra Modi.PM launched a scheme called Pradhan Mantri Mudra Yojana(PMMY), which serves to provide loans to the non-corporate, non-farm small/micro-enterprises up to 10 lakhs so that they can either start a business or expand it.
PMMY(Pradhan Mantri Mudra Yojana) has control over mudra loans. Loans are given by commercial banks, RRBs(Regional Rural Banks), small Finance banks, MFI’s, and NCBFC’c.
The beneficiary can even apply online through the portal www.udyamitra.com
You should also note that there are no agents or middleman engaged by MUDRA for availing of Mudra Bank Loans.
Statistics of PMMY From Its Inauguration
1. Total No. Of PMMY loans sanctioned:- 24,48,20,863
2. Total Amount sanctioned :- 12,30,842.83 Crores
3. Maximum people who received loans were women and youth.
4. There has been a wave of new business over the country
* as per the latest data given on the MUDRA website
Objectives And Main Features Of Mudra Bank Loan
1. The first and main objective of MUDRA bank loans is to make an environment where people do not fear to start a new business due to lack of funds or support. It gives a sustainable and value-based entrepreneurial culture. This helps in providing financial success and security to the people.
2. The Mudra bank gives refinance support to banks so that they can further provide loans to micro-units. The maximum amount of loans provided is Rs.10 lakh. The funding support constitutes micro-credit schemes for small loans, refinance schemes for regional rural banks/ commercial banks/scheduled co-operative banks, various programs for women’s enterprises, and securitization of loan assets.
3. MUDRA bank loan scheme offers loan Guarantee to borrowers, which means that the borrowers do not require any credit guarantee if they wish to take the loan.
Credit Guarantee is provided by banks such that risk sharing is offered for a group of similar loans, instead of individual debt. This efficiency and receptiveness are overall improved by the Credit Guarantee product.
4. Mudra bank loans also provide Promotional and development support to customers. Promotional and development support includes entrepreneurship development, institution development, improvement of financial literacy, skill development, sector development, etc.
Types Of Mudra Bank Loan
i. Shishu Loan:
The Shishu loan is the smallest category of the Mudra loan and is perfectly suited for small start-ups.
A small business owner can apply for a loan with a maximum amount of Rs. 50,000.
If you have an idea, kick start your business by taking a Shishu loan, which provides small capital. To get his/her loan sanctioned, the beneficiary must present his or her business idea and fill the Mudra application form.
ii. Kishor Loan:
If you already own a business and wish to expand it further, then the ‘Kishor’ type of loan can be best suited for you.
Loans in the category have the amount starting from Rs. 50,000 up to Rs. 5 lakhs.
To get the loans sanctioned, the applicant has to fill the application form and be present at the office, showcasing the current status of their enterprise.
iii. Tarun Loan:
When you have a business set up for a notable period of time and need funds to expand your business, or micro-unit wanting to set up their business, the Tarun loan is the loan you can avail.
Loan amounts of Rs. 5 lakh to Rs. 10 lakh can be given in this category.
The beneficiary must be present with documents showing the current position of his enterprise with ID proof and Mudra loan application, To meet the eligibility for Tarun Loan.
Eligibility Criteria Of Mudra Bank Loan
i. The person should be an Indian citizen.
ii. The minimum loan provided is Rs 50,000.
iii. The maximum load provided is Rs10,00,000.
iv. The loan is provided to MSME’s from rural and urban areas.
v. Authentic and valid documents should be submitted.
vi. The age limit for participating in this scheme has been set between 23 and 28 years and not more than 65 years when the loan matures.
vii. A loan is given only when you have to start or progress in the activities mentioned below:
- Agriculture:- Start, establish or expand an agriculture-allied business such as an apiary, a poultry farm, a pisciculture business, a dairy farm, a livestock farm, etc.
- Food: – Purchase of machinery or setting up of business in making papad, jam, and jellies, biscuit and bread, or selling of fruits and vegetables, etc.
- Service:- Dry cleaning, Setting up a salon, chemist shop, photocopying facility, boutique.
- Textile:- Artists who want to expand, establish, or start a business in knitting, embroidery, zari work, chikan work, stitching, etc.
- Transport:- Purchase of vehicles for the carriage of passengers or goods such as e-rickshaw, small goods transport vehicle, taxi, auto-rickshaw, etc.
Who Cannot Avail MUDRA Bank Loans?
a. Corporate firms and personnel are not eligible for this loan.
b. Loans cannot be availed for agriculture purposes.
c. This scheme does not apply to people who have an average monthly income/annual turnover greater than Rs. 15 lakh.
Which Institutions Provide MUDRA Bank Loans
The Institutions That Can Provide MUDRA Bank Loans
- Public Sector Banks
- Private Sector Banks
- Regional Rural Banks (RRBs)
- Small Finance Banks (SFBs)
- Micro Finance Institutions (MFIs)
Documents Required For MUDRA Bank Loan
The general documents required for MUDRA Bank loans are:
1. Application form.
2. Identity Proof – Any of Driving License, Voter ID Card, PAN card, Passport, Aadhaar card, any Photo ID issued by any government authority.
3. Residence proof – Any recent telephone bill, current electricity bill, passport, a recent tax receipt of the property, voter ID card, Aadhaar card, Recent bank statement that is duly attested by the bank officials.
4. 2 passport size photos of the loan applicant.
5. Bank statement for the last 6 months.
6. Identity proof and address proof of the business establishment – Copies of the most recent business license or registration certificate of the business. Other documents containing the owner’s name and the business address also could be furnished for this.
7. Rental agreement if the business establishment is in a rented facility.
8. Small Scale Industry (SSI) registration from the Ministry of Micro, Small and Medium Enterprises is required for certain businesses.
9. For the loan amount above 2 lakh, audited balance sheets of the units for the most recent three years is required along with the returns of income tax or sales tax.
10. For a partnership business, the partnership deed is required.
11. Guarantors and Promoters need to furnish assets and liabilities statements as well as the latest income tax return.
12. If you wish to obtain your loan under SC/ST category, then you should be present with the required documents.
Some Important Aspects Of MUDRA Loan
1)Repayment period:– WC/TL: in 3 – 5 yrs, including a postponement of up to 6 months depending on the income generation.
2)Mudra card: -A debit card is issued by the bank after the loan is sanctioned so that the money is used systematically by the borrower
3)Processing Fee:-0% for Shishu and Kishore to MSE Units and 0.50%(plus applicable tax) of the Loan amount for Tarun
4)Interest rates:-after announcement of Atmanirbhar Bharat borrower of the Shishu category will be given a discount of 2% for 12 months
Some New Benefits For Shishu Category
For all the recipients of the Mudra, Shishu Scheme was given these benefits under the self-reliant India program:
- Rs. 1500 crore subvention to MUDRA Shishu loan borrowers
- The government of India shall provide an Interest discount of 2% for fast recipients for 12 months
Interest Rates Of Mudra Bank Loan
The interest rate applied on MUDRA loans are based on RBI defined MCLR (Marginal Cost of Lending Rate), which are as follows:-
All the banks mentioned below have a maximum loan amount of up to 10lakhs and the repayment period of up to 5 years.
1) SBI:- 9.75% onwards and zero processing fee for Shishu loans
2) Bank of Baroda:-8.4 to 9.25 and zero processing fee
3) PNB:-8.05 to 10.30 with processing fee according to applicant profile
4) Andra Bank:- 10.40 with processing fee according to applicant profile
Note: The mentioned interest rates, fees, and charges can change depending on the sole decision of the bank and RBI. On the mentioned charges, GST and service tax shall be levied extra.
MUDRA Bank Loans Vision
Mudra loans vision has always been to be an entity supporting the Indian youth to start, expand their business. For the financial freedom of each and everyone, Mudra loans strives to support anyone having an idea
Frequently Asked Questions(FAQs)
1. Why has MUDRA been set up?
2. Are regional rural banks (RRBs) eligible to lend money from Mudra?
3. Who will monitor the implementation of PMMY?
4. Is there any scheme applicable all over India that can provide loans without guarantee is granted/guaranteer’s identity s checked?
The government launched a scheme PMMY which enables any Indian citizen having a pre-existing business or wanting to set up a business that can get a loan from bank up to 10 lakhs without any credit guarantee.
5. Is there any subsidy given under PMMY?
6. Are PMMY loans applicable to banks all over India?
7. Are handicapped person also eligible for PMMY loans?
8. I have recently graduated and want to start my own business, can MUDRA bank loan help me??
Depending upon your current business or your plan to set up a business you can apply for any of these loans to any of the banks mentioned above.
9. When will PMMY start in the Osmanabad zone and when will the scheme start in the SBI branch?
10. Is PAN card compulsory for PMMY loans?
Mudra Bank functions as a non-banking financial company and a subsidiary of SIDBI. However, in the near future, it is expected to become an independent entity.
Right now only a few sectors – Food Products, Land Transport, Textile Product, and Social and Personal Services – are being covered; however, the scope of the program is set to be expanded in the days ahead.
*SIDBI:- (Small Industries Development Bank of India)