The launch of the much awaited Pradhanmantri’s MUDRA Loan Scheme in India has facilitated many small and independent entrepreneurs in India who can avail hassle free loans to start their business enterprises. For a long time, these small entrepreneurs have been struggling to get access to the banking system, loans, insurance and other financial products that are often considered the backbone of any business.
The MUDRA Loan Scheme is a credit scheme to offer business loans of amount upto Rs. 10,00,000 to Individuals, MSME’s and self-employed professionals by the Government of India. In order to obtain this amount in the form of credit, it is not mandatory by the Banks to keep any collateral/security from the borrowers. There will be nil to nominal processing fees and foreclosure charges and the tenure offered for the repayment is upto 5 years in total.
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The Scheme was launched in April 2015, the MUDRA Bank Yojana has availed the loans to the MSME’s. The Scheme has a financial strength of Rs.20,000 crores. The MUDRA Bank aims to serve a behemoth pool of 5.7 crore small business that are currently engaged in a wide spectrum of economic activities like retail, manufacturing, trading etc from different parts across the country. The Government of India has provided two national toll free help line numbers – 1800 180 1111 and 1800 11 0001 which can be called 24×7 on any queries related to Pradhanmantri’s MUDRA Loan Scheme in India.
The term MUDRA stands for Micro Units Development and Refinance Agency. This particular scheme can also be availed by the women entrepreneurs at very concessional rates. Collateral-free business loans offered by banks/NBFCs under Mudra Yojana are categorized under three different loan schemes namely Shishu, Kishor and Tarun.
The following are the MUDRA Scheme loan limit amount for each category :
1.) Shishu Scheme: Up to Rs. 50,000
2.) Kishor Scheme: Rs. 50,001 – Rs. 5,00,000
3.) Tarun Scheme: Rs. 5,00,001 – Rs. 10,00,000
Eligible entities for the MUDRA Loan Scheme :
1.) Self-employed Professionals, Individuals, Start-ups.
2.) MSME’s.
3.) Retailers, shopkeepers, traders, artisans and manufacturers.
4.) Partnership firms, Sole proprietorships, and other such business entities.
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MUDRA Loan Scheme details & application steps :
1.) The 1st step for the applicant availing the loan under the MUDRA Scheme must approach the banks that are listed as loan providers by the scheme.
2.) The 2nd step is to provide the bank with all the relevant business details so that the bank would be able to categorize the business as per the above mentioned eligible entities.
3.) The 3rd step is the filling up of the MUDRA form for the loan, along with current account opening in the bank which would be necessary for the loan application to process.
4.) A business with a good credit history will easily be able to obtain the loan under this scheme as it is a collateral free loan.
The Prime Minister MUDRA Loan Scheme eligibility criteria for applicant is as follows :
1.) As per the guidelines laid for availing the MUDRA Loan scheme, the loan applicant must be an Indian Citizen.
2.) The availability of loans is only for Micro or Small businesses from the rural areas.
3.) The maximum loan amount quoted by the applicant should be under Rs. 10,00,000
4.) Two sets of Proprietor/Partner photocopies along with proof of Identity and Residence.
5.) Balance sheets, Income Tax/ Sales tax returns (if applicable) of last three years.
6.) Latest Assets and liabilities statement along with the income tax return of the promoters and guarantors.
7.) A Written proposal or the Partnership Deed of partners etc. of the Company is needed.