There are close to 634 lakh medium, small and micro enterprises(MSMEs) in India currently as per the Annual Report released by the Department of MSMEs(2018-19). 51% of these businesses thrive in the rural areas while urban India accounts for the rest. A whopping 11 crore people are employed by the MSME sector in manufacturing, trade and other services with 55% of the employment, a major chunk restricted to urban SMEs.
Financing MSME Sector
More than 99.5% of these businesses fall in the micro category. This refers to either a man or woman working from home and running a business. Micro enterprises are distributed equally in both rural and urban areas while medium and small enterprises that form the remaining 0.5% of MSMEs can be seen mostly in urban India. However, since most of these businesses fall in the informal sector, they face the biggest hurdle to their growth-financing. It is to make credit accessible to the MSME sector that the Pradhan Mantri Mudra Yojana was launched in 2015. Till 2018, the scheme helped generate 11.2 million new jobs, making 55% of those who availed the loans self-employed.
Any business which does not fall under corporate or farm sector including small and micro enterprises can avail a MUDRA Loan without any collateral, of up to Rs. 10 Lakhs. PMMY has reportedly led to an increase of 28% in job generation by those businesses to whom unsecured loans were disbursed. A report released by the Ministry of Labour and employment revealed that the number of people employed by enterprises in the MSME sector increased by almost 11 million to 50.4 million after benefiting from loans extended by Pradhan Mantri Mudra Yojana.
Source: Business standard
Any business which does not fall under corporate or farm sector including small and micro enterprises can avail a MUDRA loan without any collateral, of up to Rs. 10 Lakhs. PMMY has reportedly led to an increase of 28% in job generation by those businesses to whom unsecured loans were disbursed. A report released by the Ministry of Labour and employment revealed that the number of people employed by enterprises in the MSME sector increased by almost 11 million to 50.4 million after benefitting from loans extended by Pradhan Mantri Mudra Yojana.
List of Businesses Eligible For Mudra Loan
If you too are looking to avail a MUDRA Loan, here is a list of businesses that are eligible:
- Shopkeepers, vendors, selling fruits and vegetables
- Small manufacturing units with millions in proprietorship or partnership firms which fall in the non-corporate small business segment
- Tailoring, dry cleaning, two wheeler repair shops, boutiques, salons, beauty parlours, pharmacies, gyms, photocopy, stationery shops, gyms, courier services and other such service sector units
- Truck and machine operators
- Those engaged in transport of goods through vehicles and looking to purchase a passenger car, auto rickshaw, e-rickshaw, taxi, small goods transport vehicle or 3-wheeler for the purpose
- Food-service units
- Units engaged in processing of food including those preserving agricultural produce in rural areas, small service food stalls, making bakery products such as biscuits, breads and buns, running canteen services, day-to-day caterers, cold storage and cold chain vehicles as well units making jams, jellies, papad, pickles, sweets, ice and ice creams
- Shops engaged in repair, mechanic sheds
- Small scale industries involved in chikankari, cotton ginning, other traditional embroidery and hand work such as zari and zardozi, handloom, knitting and sewing, designing apparel, computer-based embroidery on clothes, traditional dyeing and printing such as tie and die, shibori work, powerlooms, as well as those manufacturing non-garment products such as bags, accessories for vehicles or home furnishings accessories and others.
Benefits Extended to Borrowers
Until November 1, 2019, a total Rs 10.24 lakh crore worth loans were sanctioned under PMMY with the number of loan accounts standing at 20.84 crore. A report released by the Labour bureau on Pradhan Mantri Mudra Yojana 2018 revealed that 80% of those who took loans through the scheme utilised the money to expand their existing business.
The remaining took the cash to set up a new business and thereby becoming self-employed. A significant majority, 89% of those surveyed were happy that a MUDRA loan was more than sufficient to meet the needs of business expansion or setting up a new one.
Women running their own business can not only get loans at reduced interest rates, but are also provided with additional facilities to encourage their participation in the workforce. Micro enterprises are offered loans upto Rs. 1 Lakh and refinance is also available for regional rural as well as cooperative banks.
However, if you are looking for a loan amount above Rs. 10 Lakhs without a guarantor to boost your business, you can apply for Bajaj Finserv Business Loan available on Finserv MARKETS. Get up to Rs. 30 Lakhs approved instantly within 3 minutes and pay flexibly between 12 to 60 months as per your convenience.
Bajaj Finserv Loan for MSME available on Finserv MARKETS offer high loan amounts along with longer repayment tenors and value added services such as tailor-made insurance plans and financial fitness reports to ensure support throughout your entrepreneurial journey. Complete transparency is also guaranteed with an online easy application without any tedious paperwork.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.