Launched in the year 2015, the Pradhan Mantri Mudra Yojana (PMMY) aims at providing financial support to small and medium scale businesses across the country. As a part of this government initiative, small businesses can avail a Mudra loan of up to Rs. 10 lakhs for meeting their financial requirement. The loan amount availed through the Pradhan Mantri Mudra Yojana can be utilized for various business purposes such as meeting working capital needs, purchasing equipment, upgrading infrastructure, promoting their products and services, etc. Since Mudra loans are unsecured loans, entrepreneurs do not have to provide any collateral while availing them. This keeps their valuable assets safe in case they happen to default on the loan amount. Mudra loans provided under PMMY are ideal for startups that have a low credit score. This is because financial institutions do not check the credit score of borrowers before sanctioning the loan amount. Hence, small businesses that do not qualify for a business loan as a result of their poor credit score, can rely on Mudra loans to meet their financial requirements.
Let us have a look at some important aspects related to Mudra loans provided under the Pradhan Mantri Mudra Yojana (PMMY):
Types of loans under PMMY
Shishu loan is ideal for young entrepreneurs who are looking to set up their new venture. Under Shishu loans, entrepreneurs can borrow a loan amount up to Rs. 50,000.
Small business owners can avail a loan amount ranging from Rs. 50,001 to Rs. 5,00,000 under Kishore loans. This type of loan is ideal for entrepreneurs who are looking to expand their business and need funds for the same
Entrepreneurs can avail a loan amount ranging from Rs. 5,00,001 to Rs 10,00,000 under Tarun loans. Entrepreneurs can apply for this loan when they are in need of a large sum for their business requirements.
It is to be noted that, while availing Tarun loan, a processing fee of 0.50% (plus applicable tax) of the loan amount is applicable. Whereas, no processing fee is charged in case of Shishu loans and Kishore loans.
Eligibility for loans under PMMY
All small businesses can benefit from the PMMY scheme. Traders, manufacturers, self-help groups, artisans, shopkeepers, etc. are eligible beneficiaries of the Pradhan Mantri Mudra Yojana. Also, to avail financial support under the PMMY, it is essential that the applicant should not have defaulted repayment of earlier loans taken from any lender.
Documents required for loans under PMMY
- MUDRA Loan Application with self-attested identity proof of loan applicant and 2 passport size photographs.
- Loan application prescribed by the lender seeking information about the applicant, past financial results and profile of the activity proposed
- Details of suppliers, types of machinery, and other items to be purchased for the activity proposed.
- Identity of business ownership and business address.
- Copies of necessary licenses and certificates to carry out the trade or activity for which the finance is availed.
How to apply for a loan under PMMY?
- You can apply for a Mudra loan under PMMY with the help of leading banks and financial institutions. The steps to apply for Mudra loan online is mentioned below:
- Choose the bank or the financial institution with which you wish to avail a Mudra loan.
- Fill the basic Mudra loan application form by providing your personal and employment details.
- Submit your KYC documents such as PAN card, Aadhar Card, or driver license, address proof along with other required documents.
- If you have an existing business, you must provide a continuity proof of your business and financial statements.
- Once you submit the application form and necessary documents, the loan under the PMMY scheme will be sanctioned by the lender.
Make sure that you compare various lenders before applying for a Mudra loan. You must go through the online reviews of the lender to get a fair idea about its service and authenticity. You can easily apply for a Mudra loan under PMMY at Finserv MARKETS. The loan application process is smooth and you will receive the loan amount in your bank account within a short duration. Efficient and reliable customer service is yet another advantage of availing Mudra loan at Finserv MARKETS. Lastly, make sure that you check your Mudra loan eligibility before starting the loan application process. This will help you avoid any inconvenience in the later stage.
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