As per the Pradhan Mantri MUDRA Yojana scheme (PMMY), the Government of India had intended MUDRA loans towards helping small business owners in the nation as well as assists them towards meeting capital expenditures as well as functioning costs. The rate of interest on MUDRA loans is 8.40% and 12.45% per annum. The maximum sum that could be borrowed by means of this loan is Rs.10 lakh. The business owners who want amounts above Rs.10 lakh could avail other business loans given by banks as well as financial institutions.
Types of MUDRA Loan
There are 3 schemes, namely Tarun, Kishor, and Shishu.
• Shishu: scheme gives loans up to Rs.50,000
• Kishor: scheme gives loans above Rs.50,000 and below Rs.5 lakh
• Tarun: scheme gives loans above Rs.5 lakh and less than Rs.10 lakh
Mudra Loan Eligibility
Some conditions that a small business should satisfy in order to meet the Mudra loan eligibility criteria are:
Micro, small and medium businesses in these sectors meet the Mudra loan eligibility necessities and could apply for Mudra loans.
Sector | Actions Covered Under Mudra Loans |
Agriculture | Start, establish or expand an agriculture-allied business, for example, an apiary, a poultry farm, a pisciculture business, a dairy farm, a livestock farm, etc. |
Food | Buy of machinery or establish a business in making papad, jam, and jellies, biscuit, and bread, or selling of fruits as well as vegetables, etc. |
Service | Establish a salon, boutique, chemist shop, dry cleaning, photocopying facility, etc. |
Textile | Artisans who wanted to start, set up or expand a business in chikan work, zari work, embroidery, stitching, knitting, etc. |
Transport | Buying vehicles for the carriage of passengers or goods like e-rickshaw, small goods transport vehicle, taxi, auto-rickshaw, etc. |
The maximum amount the business owners could apply for under a Mudra loan is Rs. 10 lakhs. A start-up could apply for a loan of up to Rs. 50,000 (Shishu loan). A business that requires the fund to establish itself is qualified for a loan of Rs. 50,000 to Rs. 5 lakh (Kishor loan) whereas an established business that requires funds for expansion could apply for a Mudra loan of Rs. 5 lakh to Rs. 10 lakh (Tarun loan). Businesses that meet Mudra loan eligibility criteria cannot apply for a loan sum which is above Rs. 10 lakh.
Mudra Loan Online Apply
The individuals could apply online for a Mudra loan through visiting any official website of the banks. These banks are inclusive of rural, public as well as private sector banks. The individuals could get an online form from their official websites, also.
The individuals are required to fill a loan application form, either for the Shishu, Kishor or Tarun loan scheme. One must download this loan application form from any website of the listed bank's institutions giving the loan. It is suitable to apply for the MUDRA loan application online, as this would avoid the difficulty and commotion of going towards the bank, waiting in line and then obtaining the loan application form. The steps in order to apply for Mudra loan online Apply include:
Step 1: One must download the loan application form
Step 2: Then the applicant must fill in the form details properly
Step 3: Then the applicant must find the public or commercial sector bank
Step 4: The applicant must finish all the other procedures by the bank
Step 5: When this procedure is completed, the loan would be sanctioned
The types of business components that could avail the MUDRA loan:
• Self-proprietors
• Partnerships
• Service sector corporations
• Micro industries
• Repairing shops
• Owners of trucks
• Foodservice businesses
• Vendors (fruits and vegetables)
• Micromanufacturing corporations
Documents required:
• Identity Proof
• Proof of Residency
• Machinery and other items quotations
• Passport size photos
• Business identity Proof
• Business address Proof
Mudra Loan Interest Rate
Bank | Rate of Interest | Processing Fee | Loan Sum | Term |
HDFC Bank | 10.99% to 20.70% | Up to 1.5% | Maximum Rs 15 lakhs | 1 - 5 years |
ICICI Bank | 10.99% to 17.99% | 2.25% | Maximum Rs 20 lakhs | 1 - 5 years |
Oriental Bank of Commerce | 10.65% to 11.65% | 0.5% | Rs 50,000 to Rs 10 lakhs | 1 - 5 years |
Some of the top lenders, as well as their MUDRA loan offerings, are:
Bank | Rate of Interest | Tenure |
State Bank of India | 11.25% | Up to 5 years |
Syndicate Bank | 8.60% - 9.85% | Based on the terms of the bank |
Bank of India | 10.70% onwards | 36 - 84 months |
Andhra Bank | 8.40% to 10.35% | 36 months onwards |
Tamilnad Mercantile Bank | 9.90% - 12.45% | 9.90% - 12.45% |
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