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Mudra Yojana Loan Scheme, Eligibility, How to Apply

Procedure to apply for PradhanMantri Mudra Yojana loan scheme

The government of India has introduced a new scheme called Mudra Yojana Loan Scheme, which is started to help the people to start their bu­­siness. The significance of the scheme is it supports people through financial assistance. The loan will aid the people to avoid availing loans at higher interest rates so that they can do any business independently. Earlier people used to approach private banks for loans or any person that results in repaying the amount with a higher interest rate.

A guide to PradhanMantri Mudra Yojana loan scheme

This blog provides you all the information that is associated with the Mudra loan scheme along with the details of mudra loan eligibilityhow to fill loan application form PradhanMantri Mudra Yojanamudra loan registration, etc.

What is Mudra loan?

The government has an agreement with the regional and state monetary organizations and provide loan to the people who are related to the micro-unit business and refineries with the scheme. The people connected with business or already have start-up business will get 50, 000 to 10,00,000 rupees from the government through the scheme as loan.

Types of Mudra loans

There are three key types of loans is existing and they are explained in this section.

Shishu category– The people who are related to small business will be classified under this category. According to the government’s instruction, the small scale business will obtain 50, 000 rupees as loan. This category is for the individuals who have planned their own business on a small scale basis and to avail the loan, you must show your business plan to the authority.

Kishore Category– This category is for entrepreneurs who have already initiated their business. In the scheme, the entrepreneur will receive a loan amount of 50,000 rupees to 5 lakh rupees.

Tarun Category– As per the guidelines, the loan is approved to the entrepreneurs who already have an established business on a large scale and thus they get the highest loan amount approval of around 10 lakh rupees.

You must remember that each governmental monetary organization has a separate rule regarding offering money. The criteria are dissimilar and the interest rate too.

The main purpose of Mudra loan

The major objective of Mudra loans is to offer loans at reasonable interest rates to the public working at the small and micro-level and support their business.

The main function of Mudra loan

The Mudra loan scheme plays a noteworthy role in small to large scale business. Due to the loan, numerous businessmen are profited as the loan someway can offer employment to the people.

Mudra loan for shopkeepers and sellers- People who have no land for agriculture or not related to agriculture can seek financial aid to initiate their own business. The scheme will lend up to 50,000 rupees for beginning small businesses.

Mudra loan for textile industry– Textile industry needs money for a projectile machine that functions as an air jet which costs about 30,00,000 rupees. And this is the reason the loan amount for this kind of business is up to 5,00,000 rupees so individuals can buy it to begin their business as a textile industry.

Mudra loan for agriculture- Currently, for improvement in the agricultural segment, modern equipment is used and this is the reason the people related to farming require money. The loan scheme is serving the farmers by offering loans at a lower interest rate for getting money for the entire year.

Mudra loan benefits

The prime benefit of this loan scheme is that there is no least interest rate or there is no highest interest rate. The interest rate is decided by the bank and is fixed. The amount of loan is also the same and ranges between 50,000 to 10, 00,000 rupees.

The other decent part of the loan is the applicant need not keep any property to avail the loan from the bank. There is not even any mortgage system so getting the loan is much easier.

Eligibility criteria for Mudra loan

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Eligibility criteria for Mudra loan.
Eligibility criteria for Mudra loan.

Below are the details of Mudra loan eligibility.

Business owners- People who have businesses are qualified to act as the beneficiary of the scheme; either it is small or large they are qualified to acquire loans under this scheme.

Shopkeepers- The people who are related to retail business even need money to expand the business. The Mudra loan scheme in that case will provide money to the individuals who need for developing the business.

Small producers- People who have small scale industrial units are also eligible to obtain loans through the scheme.

Farmers- As the scheme is meant to aid in financial support to the people connected with agriculture as well; thus they can have money without any mortgage even with a fixed interest rate.

Types of banks that offer Mudra loan

As we all know that there are many financial institutions are there that offer loan and they are mentioned below.

Micro Finance Institute– In this, people related to small businesses are provided with loans by MFIs for their businesses. The MFI scrutinizes all the papers to determine whether the applicant is qualified for the Mudra loan or not.

Regional Rural Banks– The central government provides 50% of the capital and the corresponding state government 15% of the capital to the provincial rural banks. Then these banks offer Mudra loans to small businesspersons and farmers.

Private Banks– The government has also requested many private banks to provide loans. These banks can select any process for lending, but the interest rates must be enclosed under the Mudra loan only.

Small Finance– These banks mostly provide loans to small businesspersons, micro-enterprises. For a loan of about Rs. 50,000 or lower than that nothing must be produced in front of the bank. The necessity for PAN card has nowadays been passed over for an amount lower than Rs. 50,000 so, one can get avail it without PAN card.

Public Sector Banks– Few public sector banks provide loans to individuals under this central government loan scheme for about 50,000 to 10,00,000 rupees.

OBC mudra loan: Oriental Bank of Commerce also offers Mudra loans and the eligibility criteria are similar to the PMMY scheme and the rate of interest starts from 8.75% onwards.

Required documents for Mudra loans      

The interested applicants must submit some vital documents during application to avail of the loan under this scheme. The documents required are mentioned below.

ID proof– As the loan scheme is qualified for the people in India so the desired candidates must produce ID proof like voter ID, Aadhar Card, telephone bill, or passport.

Address proof– According to the guidelines of the scheme, the intended candidates are requested to submit the address proof during the time of application for the loan. In the form of address proof, you can provide a copy of passport, Aadhaar card, voter ID, bank details, telephone bill, etc.

Caste certificate– Candidates who are associated with backward classes are requested to produce a caste certificate to prove that they belong to a backward class.

Passport size photo– The candidates are requested for providing two 2 passport-size photographs during application submission.

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How to apply for Mudra loan?

To apply for the loan under the scheme the applicants must visit the official website of Mudra loans apply online from www.mudra.org.in. After checking see for the form on the site and download it to duly fill with appropriate information. You can take the application form from the bank having your account.

Things to know about the loan

The rate of interest and the guidelines for taking loans may vary for different banks. However, the rate of interest is observed by the scheme and there is an edge, which can’t be crossed by any bank.

The applicants should repay the loan within a period of 5 years with interest.

Even women are qualified to get a loan and the loan will be offered by the United Women Entrepreneur Scheme. In this scenario, the women should be 50% shareholders to the business when applied.

How to fill the Mudra loan application form?

To fill the Mudra loan application form you need to first get the application form. You can approach any nearby branch offices such as banks, NBFC, MFIs, etc. to avail of the Mudra loan application form. Later you need to gather all the documents required as per the checklist. Then you need to fill the form as the type of Mudra loan you wish to apply. You should also mention the amount you need.

What is a currency card?

A currency card will be given by the scheme after the loan gets approved. The card is also identified as a Mudra card. The person who gets the card will be capable to withdraw money by the card. When anyone applies for the Mudra loan, the bank will open an account on his/her name and the applicant will have the card once the application is approved by the bank. The bank will send the amount directly to the applicant’s account and the applicant can withdraw the amount with the card whenever it is needed.

The conclusion of  PradhanMantri Mudra Yojana Loan Scheme

After discussing all the information written above, it can be established that the loan is a ground-breaking step is taken by the government. The people who have been stressed with financial problems for years and could not enlarge their business or could not even begin a small scale business will get the chance to initiate one. The farmers who have been dealing with loan connected outrages by the private banks or the persons who lend money against high interest. With the proposal of the scheme, the government can protect the people and decrease the burden of loan from them. It will aid to develop the financial situation of the folks who are being unnoticed by society.

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4 COMMENTS

  1. This is very good, long awaited can resolve lot of issues and most welcomed schemes.
    I would like to bring in a little bit of information in this regard. The Central Government should involve fully in this scheme to advise the applicant in identifying the required field under which the person can get a loan to start a venture. It must be done in state, district and village level for individuals. For example the district has an automobile manufacturing, or other manufacturing units. One the group under government should make a survey, to identify the allied products needed for the main industry, allocate those for people to make in that area. So the person who starts the unit works under supply and demand met conditions. Identify small unit manufacturing products district wise give them to the eligible candidates. The main units in that industrial belt will have requirements for thousands of small items which can be manufactured by these small units and supplied. Like Packing materials, bottles both glass and plastics, hundreds of items needed for the main super markets, can be produced like bread, edible products, packed goods like oil, Organic products, tissue paper etc etc. This will help the main units to produce at less cost main products at the same time help small units to come up. The main vehicle manufacturing units requirements are for vehicle interior decor items, welded parts like brake/Clutch pedals, rubber and similar parts then the small units can make them and supply them.This way the small units will also perish. Identify items by the government dedicated agencies district wise bring to the notice of people, start small unit which can generate employment. This way the small units as well as main units benefits.
    Now what happens is, if one person starts a small unit all the other people in that area starts similar units and they come naturally to a stagnation soon and the interests are lost.
    There are a thousand ways to help the needed people, only thing you need, is a government who thinks of the people, society, and its up bringing. Unlike the previous governments, the present government is focuses for the overall development of the nation and its people.
    Jai Hind.

  2. My business regd. address is at Meerut & main operation area is In Moradabad .In GST both places are mentioned , But while approaching for Mudra loan from SBI, they needs adhar card address of Business operation place. Is there no any provision that On adharcard address Loan can be applied, despite main operation of business area is in another city.

    Kindly help

  3. Hello Mr. Sunder Lal Bhatt. Thank you for your interest in reading our blog. As per your query, your working address is different from registered address. So, it would be a better option if you can change your registered address to present working address in aadhaar card by applying online. Because this is the most important document required. This is mandatory during the inspection of loan. They will check all the documents and proofs along with the machinery so you need to change the address in aadhaar card via online.

    We also suggest you to visit other banks like Bank of Baroda, etc for Mudra loans as they might suggest you some important clue in this aspect.

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