The MUDRA scheme, also known as Micro Units Development & Refinance Agency scheme, was introduced on April 8, 2015, with the goal of assisting small or micro firms by providing refinancing. This scheme offers loans of up to Rs. 10 Lakhs to non-corporate, non-farm small/micro firms and these loans are known as MUDRA Loans. The government offers these loans to borrowers through Banks, MFIs, and NBFCs. With the help of this loan, small/micro organizations can grow their businesses.
The MUDRA scheme is classified into three categories that are 'Shishu, Kishore, and Tarun.’
Each category offers different funding in accordance with the requirements of the borrower.
Shishu: Upto Rs. 50,000
Kishore: Between Rs. 50,000 to Rs. 5 Lakhs
Tarun: Between Rs. 5 Lakhs to Rs. 10 Lakhs
This financing, however, is not accessible to every entrepreneur. The government has created a list of enterprises that are qualified for a MUDRA Loan. As a result, before applying for this loan, you must determine whether your business falls under the MUDRA scheme or not.
With a vision to provide refinancing to MSME units as well as to encourage youth entrepreneurs, the MUDRA scheme is focused on the development and growth of the country. The three products offered by MUDRA Shishu, Kishore and Tarun, are developed to meet the requirements of different sectors/ business/ entrepreneur segments. You can opt for any of them and grow your business.
Your identity proof, address proof, income proof, bank statement for the last six months, and passport size photographs are the most important documents for a MUDRA Loan. You can also check detailed list of mudra loan documents
No, you are not obligated to provide any collateral or security in order to procure this loan.