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✓Minimal Documentation ✓Flexible Repayment ✓Collateral Free Loan | Apply for Business Loan Now!

What is Mudra Loan?

India is home to an increasing number of micro, small, and medium enterprises. While these organisations have a considerable workforce, it has historically been a challenge for them to acquire funding. To aid these growing enterprises, the Government of India launched the Pradhan Mantri MUDRA Yojana on April 8, 2015. Mudra, an acronym for Micro Units Development and Refinance Agency, aims to fund the growth activity in the non-farming and non-corporate sectors. The scheme enables eligible entrepreneurs/enterprises to borrow funds up to Rs. 10 Lakhs.

Achievements Under PMMY Since Inception

Financial Year

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

2020-2021

No. of PMMY Loan Sanctioned

3,48,80,924

3,97,01,047

4,81,30,593

 

5,98,70,318

5,83,65,823

4,31,72,305

Loan Amount Sanctioned

₹1,37,449.27 Crores

₹1,80,528.54 Crores

₹2,53,677.10 Crores

₹3,21,722.79 Crores

₹3,21,722.79 Crores

₹2,78,520.37 Crores

Loan Amount Disbursed

₹1,32,954.73 Crores

₹1,75,312.13 Crores

₹2,46,437.4 Crores

₹3,11,811.38 Crores

₹3,11,811.38 Crores

₹2,63,741.95 Crores

*Provisional Data 

Features of Mudra Loan (PMMY)

The Mudra loan carries several defining features that distinguish it from other financial products offered by the government.

  • It is targeted at businesses engaged in trading, manufacturing, or providing services.

  • The loan amount can be used to fulfil working capital requirements.

  • The funds can be employed for diverse purposes such as the purchase of machinery, growth expansion, business restructuring, meeting extended working capital requirements, and more.

  • Both new and existing enterprises can apply for the Mudra loan.

  • The loan repayment tenure ranges from 3 to 5 years.

  • The loan can be applied online through the official Mudra site.

Mudra Loan Infographic

What are the products under PMMY?

The PMMY scheme offers 3 products to eligible entities, namely Shishu, Kishore, and Tarun. The details of these three products are explained here.

Shishu loan

Shishu loans under the Mudra scheme allow entrepreneurs on the threshold of starting a business to borrow up to Rs. 50,000. The following details need to be furnished to avail this loan.

  • Quotation of machinery and other items that need to be purchased
  • Details of plant and machinery purchased
  • Details of the supplier providing the plant and machinery

Shishu Loan uder Mudra Scheme

Kishore loan

Kishore loans range from Rs. 50,001 to Rs. 5,00,000. They’re ideal for businesspersons who require additional funds for expanding their trade. Here’s a checklist of details and documents needed.

  • Balance sheet of the business pertaining to the two previous financial years
  • Income tax and sales tax returns
  • Bank account statements for the previous 6 months
  • Estimated balance sheet for the next 1 year or for the duration of the loan sought
  • Memorandum of association and articles of association, if applicable
  • The application process is totally online, hence the process, right from approval to disbursal is quite simple. 
  • A report exploring the technical and economic sustainability of the applicant’s business

Kishore Loan under Mudra Scheme

Tarun loan

Tarun loans under the PMMY scheme range from Rs. 5,00,001 to Rs 10,00,000. Business owners who wish to avail a Tarun loan need to furnish these documents, in addition to the details required for applying to Kishore loans.

  • Proof of address
  • Proof of identity
  • Certificate of SC, ST, OBC, as applicable

With the PMMY scheme, you can borrow up to Rs. 10 lakhs. If your business is in need of more capital or funds, or if you don’t qualify to borrow under the PMMY scheme, you could always avail a business loan on Finserv MARKETS. On Finserv MARKETS, you can apply for loans as high as Rs. 30 lakhs without the need to provide any collateral. The application process is totally online, hence the process, right from approval to disbursal is quite simple. 

Tarun Loan under Mudra Scheme

Mudra Loan Eligibility Criteria

Citizens within non-corporate/non-farming micro, small, and medium enterprises (MSMEs) in rural and urban India can apply for the Mudra loan. You meet the eligibility criteria if you are a:

  • Small manufacturer

  • Artisan

  • Shopkeeper

  • Individual occupied in agriculture

  • Fruit and vegetable dealer

The loan can be availed through participating institutions like banks, NBFCs (non-banking financial institutions), and MFIs (micro-finance institutions).

To know more details on availing a Mudra loan, checkout our mudra loan eligibility page.

Purpose of Mudra Loan

The Micro, Small and Medium Enterprises (MSMEs) have contributed significantly to the growing economy of India. In addition to that, MSMEs also play a crucial role in generating job opportunities across the nation. Keeping all these factors in mind, the Indian Government has established Micro-Units Development and Refinance Agency (MUDRA) to offer financial support to small businesses and startups in India.

MUDRA loan is approved and disbursed by public and private banks and NBFCs registered under this scheme. The primary benefit of this loan is that it is provided without any collateral. The capital obtained from a MUDRA loan scheme can be utilized to grow and expand businesses.

The table below displays the number of loans sanctioned under the PMMY scheme in the past few years.

Financial Year

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

No. of PMMY Loans Sanctioned: 

3,48,80,924

3,97,01,047

4,81,30,593

5,98,70,318

5,83,65,823

Loan Amount Sanctioned:

1,37,449.27 Crore

1,80,528.54 Crore

2,53,677.10 Crore

321722.79 Crore

3,21,722.79 Crore

Loan Amount Disbursed:

1,32,954.73 Crore

1,75,312.13 Crore

2,46,437.40 Crore

311811.38 Crore

3,11,811.38 Crore

Mudra Loan Interest Rates & Charges

  • Interest rates:

The Pradhan Mantri MUDRA Yojana allows eligible applicants to borrow funds up to Rs. 10 Lakhs. The interest rate on the Mudra loan varies depending upon the applicant’s profile and business requirements at the discretion of the lending institution.

  • Processing charges:

No processing fee is applicable on a Mudra loan for amounts up to Rs. 50,000. For amounts ranging between Rs. 50,001 and Rs. 10 Lakhs, an interest rate of 10%, processing fee of 0.50%, and additional taxes are applicable.

Benefits of Taking a Mudra Loan

The Mudra loan offers several benefits to help your business idea strive. Some of the most notable benefits include:

  • No Collateral:

It can be difficult for a new/upcoming business to provide a collateral. The Mudra loan saves you from this hassle as the loan is provided without the need for pledging any form of security.

  • Nominal Interest Rate:

The rate of interest on a Mudra loan does not exceed more than 1% per month. The interest rate is heavily driven by individual banks.

  • Easy Withdrawal:

Once the loan is approved, the loan amount can be withdrawn using the Mudra loan card. There is no need for a beneficiary to visit the bank.

The benefits of the Mudra loan are notable, and you must carefully go through the above-stated eligibility criteria before applying for one. Staying well-informed about the offerings will help you avoid any inconveniences while applying.

How To Apply for Mudra Loan

Here are the steps to apply for mudra loan:

Step 1: To apply for a Mudra Loan documents such as ID proof, address proof, and business proof are required.

Step 2: Proceed to filling the application form after you choose your preferred lender who is registered under the scheme.

Step 3: Upload the documents and submit your application form.

Step 4: Post-approval, you will receive a MUDRA card. Through the card, you can take the amount from your account.

To know more on Mudra Loan Application Procedure, visit Mudra Loan Apply Section only at Finserv MARKETS

Mudra Loan Card

MUDRA Card is an innovative product which makes credit easily accessible to small businesses while providing flexibility to the card owner. It can be used as a credit card with an overdraft (loan) limit and can also be used as a debit card with the facility of ATM withdrawals. The borrower can make use of a MUDRA Card to make multiple withdrawals and credits. This card also helps in digitalization of MUDRA transactions and creating credit history for the borrower.

Lates Mudra Loan News

Telangana needs more Mudra loans  

The Micro Units Development and Refinance Agency (MUDRA) Loan scheme which falls under the ambit of the Pradhan Mantri Mudra Yojana(PMMY) is a scheme which aims to provide collateral-free loans uto Rs. 1o Lakhs to micro and small enterprises at attractive interest rates.

The vice chairman of the Telangana Planning Board has informed that the population benefiting  under the PMMY scheme has starkly fallen from 17.86% in 2020 to 10.62% in 2021. He points out that more and more applicants are approaching banks to avail  Mudra loans but are being rejected by officials who claim that the state has already crossed their sanctioned target. He has, thus, requested the center to sanction 30 Lakh additional Mudra loans to eligible borrowers in Telangana.

- February 25, 2021

Frequently Asked Questions on Mudra Loan

  • ✔️Who is eligible to apply for Mudra Loan?

    Small manufacturers, shopkeepers, artisans, and individuals carrying on agricultural activities like rearing livestock and raising poultry are all eligible to apply for the Mudra loan under the PMMY scheme. All small businesses, whether they’re proprietary concerns or firms in rural or urban areas, can avail Mudra loans. Keep in mind that the applicant must be an Indian citizen above 18 years of age.
  • ✔️What is the maximum amount of loan you can avail under the PMMY scheme?

    You can avail loans under any of the three products offered by the PMMY scheme. Here’s a breakup of the maximum amounts you can borrow under each of these three products.

    1. Shishu loan product: Up to Rs. 50,000
    2. Kishore loan product: Up to Rs. 5,00,000
    3. Tarun loan product: Up to Rs. 10,00,000
  • ✔️Does CIBIL score affect Mudra loan eligibility?

    Your eligibility to apply for a Mudra loan does not depend on your Credit score. So, anyone who fulfils the other criteria required to avail this loan can go ahead and apply for the same, irrespective of their credit history.

  • ✔️Is there any subsidy on mudra loan?

    At present, there is no subsidy on MUDRA loans. But, the interest rates are much lower than what banks charge. Through Mudra Loan, credit to small businesses is given at reasonable rates.

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