"Mudra loans under Pradhan Mantri Mudra Yojana can be availed from a nearby branch office of a bank or NBFC. Read this article to know the scheme in detail."
Published: 13 December 2022
Updated: 6 February 2024
If you are running a small business then money is very important to run this business smoothly. To fulfil your business financial needs sometimes you need to take out a loan. The government is also serious about this problem of businesses and launched an initiative named Pradhan Mantri Mudra Yojana. Scheme. Under this scheme, the government provides loans to Small and Medium Enterprises, New businesses, and Startups. In this article, we will guide you about this scheme, scheme features, eligibility, application process, and more about it.
Pradhan Mantri Mudra Yojana is a supporting resource to help small businesses and new businesses with funding needs. This plan is run by Micro Units Development and Refinance Agency Limited and this organization works under SIDBI. This plan gives loans up to 10 lakh rupees to businesses that are not corporate, not farming, and MSMEs. In 2015, Pradhan Mantri Shri Narendra Modi started this plan to help business people and money access in the country.
Pradhan Mantri Mudra Loan is distributed into three kinds of different categories and these are decided according to business growth and financial needs of the businesses. These three categories are below.
Under the Pradhan Mantri Mudra Loan, the Shishu scheme provides loans up to Rs 50,000 to those facing difficulty in launching their business in the starting phase. With this financial support, these businesses can stand up and move to the next step of growth.
In the Kishore scheme, businesses can take loans from Rs. 50,000 to Rs. 5 Lakh. This loan is ideal for existing companies who wish to borrow more money to expand.
This loan category allows companies to borrow funds between Rs 5 lakh and Rs 10 lakh based on their needs. This category is suitable for companies that are currently established and have a strong reputation in the industry but wish to expand. More investment may be required to build it.
Pradhan Mantri Mudra loan is supported by the government of India and it is provided by multiple Banks, NBFCs, and other financial bodies. In this loan scheme interest rates are different from all financial organizations. Banks and NBFCs can decide the interest rates of this loan scheme according to their policy and it also depends on other factors like the amount of loan, repayment period, business creditworthiness, etc. Below are the details of common interest rates of three types of mudra loan schemes.
This loan is a starting option for financing for entrepreneurs who want to start their own businesses. The interest rate under this loan varies between 8% to 12% p.a. Some Banks and NBFCs cut the process fees and other costs from the loan form.
Under the Kishore Loan Scheme financial institutes keep the ranges of interest rates between 10% to 14% annually. Some Banks and NBFCs reduce the process fees and other charges from the loan application.
Under the Tarun Loan Scheme businesses can take big loan amounts up to 10 lakh rupees. The interest rate is between this loan category between 12% to 16% annually.
The eligibility criteria to get (PMMY) loan are given below.
1. Applicants who are applying for the PMMY loan their age should be above 18 years and have citizenship in India.
2. If the Borrowers are engaged in activities like non-corporate, non-agricultural SMEs in manufacturing, trading, and services-related sectors they are eligible to apply.
3. Your financial profile should be clear with a good CIBIL score.
4. Before applying for a loan you should have good knowledge to operate your business with proper future planning.
5. All necessary documents for loan application are there and valid.
To get profit from this loan businessmen must have a good business strategy and a project report, as well as the ability to repay the loan.
To take this loan you should provide a business plan and project report. If your business comes under the GST slab then you need to provide GST details. Bank account Details and Statements of 12 months of A/c are also important for eligibility.
People who want to apply for this loan have a big business in the market. You need to provide a business report and a proper plan. You should provide a 12-month Bank A/c Statement. ITR details of 2 years are also required for this choice.
If you are ready to apply then you need to prepare some documents. Below are the details of some basic required documents.
1. Identity Proof: Aadhar (UIDAI), PAN Details, Passport, Driving license
2. Present Address Proof: Aadhar (UIDAI), Voter EID, Passport, Electricity and Water Bill, Rent Agreement.
3. Business Activity Proof: GST Details, MSME ID, Company Registration Certificate, Trade License
4. Requirement of a business plan or project report.
5. Copy of 12 months bank statement
6. A copy of the ITR of the last two years is required
Go to the bank or apply online on the Mudra website
Choose Shishu, Kishor, or Tarun loan type
Submit the loan form and documents and keep the receipt
The bank will check your documents
The bank will say yes or no to a loan based on your details
If the bank says yes, you will get money in the account
Pradhan Mantri Mudra Yojana Loan is a plan to support new businesses and previous businesses. Govt. provides financial support to companies. Under this funding scheme owners of a business can get many good benefits like low interest rates, collateral-free, easy repayment, and smooth form filling. If you also have your business and need money then you should get a loan from Pradhan Mantri Mudra Yojana.
1. Who is eligible for a Mudra loan?
Ans - Any person who is running a small or micro-enterprise business, a non-corporate firm, and a non-agriculture industry is eligible to apply under the Mudra Scheme.
2. What is the interest of Rs 50000 on the Mudra Loan?
Ans - The interest rate determined on a loan of Rs 50000 under the Pradhan Mantri Mudra Yojana depends on many factors like the personal and business profile of the applicant, But generally the interest rate of a Mudra loan is 8% to 16% per annum.
Q.3 What is a 10 lakh loan in PM Modi?
Ans - Under the Pradhan Mantri Yojana, Rs 10 lakh means the amount that is provided as a loan to businesses with large potential. Loans up to Rs 10 lakh are given to businesses that come under the Tarun Loan category.
4. Who is not eligible for a Mudra Loan?
Ans - Businessmen belonging to corporate business, farmers, etc. category are not eligible for Mudra Loan but apart from this if the financial profile of any person is present as a defaulter or the complete documents related to the application process are not available then such applicants are also not eligible for Mudra Loan.
5. Can I get a Mudra Loan for personal use?
Ans - No, Mudra loan cannot be taken for personal use because this scheme has been started by the government to provide financial assistance to such businesses that are facing financial crisis.
