Do you have an ideas as to How to apply for Mudra Bank Loan? If not and you are interested in knowing about Mudra Loan, this post is for you.
MUDRA: A Glimpse
Micro Units Development & Refinance Agency Ltd. (MUDRA) is a new institution set up by the Government of India. This is set up to avail the facility of funding to the non- corporate, non-farm sector income generating activities of micro and small enterprises whose credit needs are below or up to Rs 10 lakhs.
Under the Pradhan Mantri Mudra Yojana Scheme (PMMY), the Government of India has designed the loans to help MSME owners in the country and help them to meet capital expenses & operating costs. You need to have a business plan to apply for a MUDRA loan. Therefore, you cannot obtain a MUDRA loan for your personal requirements or purposes.
Moreover, you can apply for MUDRA loan online by filling the application form available on their official website.
In India, SMEs have always challenges for the look of financial support from the formal banking or financial sector. This bottleneck affects the growth of small business and makes them ineffective at competing with larger players. For all these, MUDRA bank has been set up as a subsidiary of SIDBI.
Under the MSMED act, 2006, Udyog Aadhar is a registration provided to micro, small, medium size businesses in India. To enable the micro, small and enterprises to efficiently compete with international competition, to promote growth to extend the benefits of various government schemes, etc. are the main objectives of the MSME department concerning providing Udyog Aadhar registration.
Loan Under MUDRA:
There are mainly 3 types of loan facilities are provided currently under Pradhan Mantri MUDRA Yojna are as following:
- Shishu: This loan scheme is provided for people who require lesser funds. Under this, an applicant can obtain a loan of Up to Rs. 50,000.
- Kishor: This loan Scheme is suitable for applicants that have already begun their business but need some more money to improve it. Under the Kishor loan, an applicant can apply for a loan between Rs. 50,000 and Rs. 5 lakhs.
- Tarun: This loan is beneficial and is the highest loan amount granted to individuals under the MUDRA loan scheme. Under the Tarun loan, an applicant can get the benefit of a loan of Rs. 5 lakhs to Rs.10 lakhs.
MUDRA Loan Eligibility Criteria:
Indian citizens who have their business plans for service sector activities, manufacturing, processing treading and whose credits needs are less than Rs. 10 lakh can apply for MUDRA loan.
Small manufacturing business owners, fruits and vegetable sellers, artisans, shopkeepers and those associated with various agriculture activities these are the target audience for MUDRA loans.
How to Apply MUDRA Loan?
To apply MUDRA loan, the borrower can approach a bank or financial institution providing MUDRA loan while carrying on the following process.
1. Applicants should visit their nearest commercial or private bank with their small business plan.
2. Fill and submit the loan application form.
Documents required for MUDRA Loan:
- Identify proof like PAN/ Drivers License/ Aadhar card, Passport and more.
- Address proof and company address proof, company identity card.
- Applicant’s recent photograph less than 6 months old.
- Quotation details of machinery or other items to be purchased regarding your business.
- Proof of category like SC/ST/OBC/ minority, if applicable.
3. Complete all further and procedures by the bank.
4. Your documents will be verified.
5. The loan will then get sanctioned to the applicant.
MUDRA Loan Scheme: Choose the Right Bank
To get the loan, the applicant will have to first contact the banks around him. The applicants can gather all the information about the loan process and interest rate. After getting all the information, you have to complete the application form and submit some documents along with it for sanction the loan.
Following are the list of 29 Banks under the MUDRA loan scheme:-
- Allahabad Bank
- Andhra Bank
- Axis Bank
- Bank of Baroda
- Bank of India
- Bank of Maharashtra
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- Federal Bank
- HDFC Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- J&K Bank
- Karnataka Bank
- Kotak Mahindra Bank
- Oriental Bank of Commerce
- Punjab and Sind Bank
- Punjab National Bank
- Saraswat Bank
- State Bank of India
- Syndicate Bank
- Tamilnad Mercantile Bank
- UCO Bank
- Union Bank of India
- United Bank of India
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MUDRA Loan Repayment Period
Applicant will receive the loan amount for a time of 5 years only. During these 5 years, the applicant will have to repay the loan amount to the lender/ bank in the form of EMIs. Since the interest rates are quite low the applicant will not find any difficult to pay the installment of the loan.
By the MUDRA loan applicant can take benefits of banking and financial services in both rural and urban areas. Food vendors, shopkeepers, and other small business owners can make the most of the scheme at a very low-interest rate.
Further, MUDRA loan yojna is very beneficial for women enterprise programs and Micro credit units. It facilitates investment and improves skill developments. In addition to it, this helps build the best manufacturing infrastructure in the country.
What’s your take on the Mudra Loan scheme? Is it a good financing option for small business owners? Feel free to discuss.