On April 8th, 2015, P.M.Modi implemented a Non-Banking Finance Company scheme (NBFC). It is nothing but Pradhana Mantri Mudra Yojana (PMMY). Micro Units Development and Refinance Agency (MUDRA) helps supports the development of micro/small enterprises.
Every individual wish to start a business and to expand it. But why only a few will succeed in this path? Planning for big is good, but besides planning, we also need to be financially safe to put in place this. But what if we don’t have enough money? Who will lend us money?
Is it safe to lend money from private banks? These are all the questions that come into an individual when he/she plans to start a business. So to support every individual to raise their talent, the government of India has taken a step forward and launched Pradhana Mantri Mudra Yojana. Lets read about it in detail.
Before going to apply for a loan, we need to know much about this loan. So to help you, we have done a lot of research, and this article will guide you on the right path.
PMMY(Pradhan Mantri Mudra Yojana) has a 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 Loans.
Pradhana Mantri Mudra Yojana (PMMY):
Under this scheme, Banks, MFIs, NBFCs lend you some amount, and the interest rate depends on the terms and conditions of the respective bank. Later the government provides refinance to these banks where you have taken your loan. This MUDRA loan is given under three categories depending upon the funding needs required. Every bank, whether it is private or public sector gives you this MUDRA loan.
Statistics of PMMY From Its Inauguration
- Total No. Of PMMY loans sanctioned:- 24,48,20,863
- Total Amount sanctioned :- 12,30,842.83 Crores
- Maximum people who received loans were women and youth
- There has been a wave of new business over the country
* as per latest data given on MUDRA website
Categories Of Pradhana Mantri Mudra Yojana (PMMY)
The three categories are Shishu, Kishor, Tarun.
This loan is designed for start-ups with an offering up to ₹ 50,000. This scheme helps when a person is starting his/her first start-up company. This category is given more preference than the other two to promote entrepreneurship. The processing time for this loan is 7 to 10 working days.
Under this scheme, the loan is approved for enterprises whose company has already started and want to establish their business in the world. The loan starts from ₹50,000 to ₹5 lakhs. It has given more importance rather than the Tarun category.
From ₹5lakhs to ₹10lakhs, the money has been issued to the enterprises who want to expand their business. The interest may vary from one category to another based on the type of loan and the type of bank you choose. Banks like ICICI Bank, IDBI Bank, State banks, and non-cooperative banks offer you MUDRA loans. There is no smallest amount, but the maximum amount that loan offers is ₹10lakhs. But who can apply to this loan? Can we apply for a loan online?
Who Can Apply To MUDRA Loan Or Pradhana Mantri Mudra Yojana ?
The Eligibility Criteria For Pradhana Mantri Mudra Yojana (PMMY)
a. Small Manufacturing Company Owners:
As I have already said, the person who wants to start a company but steps back because of less investment can apply for this loan. Even people who want to expand their business in the market can also take a loan under the Kishor and Tarun category.
b. Non-Farm Sector:
Business-like fruits and vegetable sellers, dairy product manufacturers, beauty parlors, saloons, transport sectors, and many more are eligible to apply for this scheme. As of now, the government decided to lend support to pisciculture, horticulture, trading, textile industry, and other service sectors. At present, there are four funding support schemes from MUDRA Yojana.
c. Micro Credit Scheme (MCS):
In this scheme, loans up to ₹ 1lakh are sanctioned through mutual fund investments (MFIs) or some financing institutes.
d. Refinance Scheme:
When a person gets a loan from Commercial Banks/Regional Rural Banks (RRB)/Small finance banks/Non-Banking Finance Companies (NBFCs), government refinance them through this scheme. Refinance is available up to a loan of ₹10lakhs per unit.
e. Women Enterprise Program:
The government has taken a step forward to support women. Through this special act, the government reduced interest for the loan taken by women. At present, the government decided to reduce the interest of 25 basis points in its interest rates to banks who issue a loan for women.
For safety and security government has started to securitize the loan portfolio, and when the loan is sanctioned, only the respective person has access to it.
Who Cannot Avail MUDRA Loans?
- Corporate firms and personnel are not eligible for this loan.
- Loans cannot be availed for agriculture purposes.
- This scheme does not apply to people who have an average monthly income/annual turnover greater than Rs. 15 lakh.
The Institutions That Can Provide MUDRA Loans
- Public Sector Banks
- Private Sector Banks
- Regional Rural Banks (RRBs)
- Small Finance Banks (SFBs)
- Micro Finance Institutions (MFIs)
Interest Rates And Charges Of Pradhana Mantri Mudra Yojana
Here MCLR represents the Marginal cost of funds-based lending rate an interest rate for banks fixed by the Reserve Bank of India (RBI).
For a demand loan, the maximum period given is 36months, and for a term loan, it is 84 months, including moratorium. Here moratorium means a period where you don’t have to pay EMI for the loan taken. A demand loan is a complete repayment without warning the client, whereas a term loan is where you can repay over a while.
Modes Of Applying For Pradhana Mantri Mudra Yojana (PMMY)
So we learned so much about the MUDRA loan, and one part of our duty has completed, but what next? Well, to start a business learning things is not the only process, but we need to learn how to apply for a loan. But in today’s world, we have both online and offline modes for applying for the loan. Some can make their work easier through online mode, but some who don’t know how to operate they choose offline. So we are here to guide you on how to apply for loans both offline and online mode. Let’s get into that!
Applying for Pradhana Mantri Mudra Yojana Or Mudra loan through Offline Mode:
- The first thing you have to choose is to select the most popular and safe bank that is near to you.
- Then approach them and discuss the type of business and the loan category that you wish to choose. Write a self-written business plan and submit it.
- Later provide all the necessary documents such as filled application form, passport size photos, caste certificates, identity proofs, address proofs, company documents, etc. This step is essential because the bank has to verify all your accounts to proceed further.
- Once the submitted documents are verified, the loan is sanctioned with the amount that you asked. A manager will approach you and discuss the interest and charges that you have to pay.
Applying for Pradhana Mantri Mudra Yojana Or Mudra loan through Online Mode:
- Go to the website of a respective bank that you select.
- Fill the application form with all the required documents and submit them. Save a copy for the future.
- Later wait for the bank representative to call you and then proceed with further steps on the loan.
- Once the documents and application form are verified, then your loan is approved.
Documents Required For Applying In Pradhana Mantri Mudra Yojana (PMMY)
- Proof of identity House card, Aadhaar card
- Passport size photos
- Proof of business address
- Business identity card.
Provide all the required information like your phone number, Aadhaar cards, your caste certificate and the previous loans you have taken and the name of the bank, etc.
Once your loan is approved, then you will receive a MUDRA card. This is a debit card, and the borrower can use this card for withdrawal and credits. This card can digitalize the credit history of the borrower. This card can be accessed over the entire country and money can be withdrawn from any ATM/micro ATM.
Frequently Asked Questions:
1. Does the Pradhana Mantri Mudra Yojana scheme extend the portfolio guarantee?
2. What are the synergies aligned with PMMY?
3. What is the normal repayment time for the MUDRA loan?
4. Do the lenders offer a pre-approved MUDRA loan?
5. What happens if the loan is not yet paid back?
6. Which bank is best for the Mudra loan?
7. Can I take Mudra loan for multiple times?
Don’t step back when you are not able to start a business, the government has taken every individual’s responsibilities so that you can develop and in return, our country can develop. So come forward and apply for the Pradhana Mantri Mudra Yojana and let’s hope for the best!