Pradhan Mantri Mudra Yojana is a new scheme under Micro Units Development and Refinance Agency for developing and refinancing activities that are relating to micro units. This scheme was announced while presenting the budget for the 2016 financial year. The main purpose of this loan is to provide funds to non-corporate small business sectors.
Micro units are the small organizations, companies and start-ups in India. The most common observation about the micro units is that they lack funds to financial support their business.
Micro Units Development and Refinance Agency Bank has been set up by the Indian Government to fulfil all the funding needs of the non-corporate small business. The responsibility of Micro Units Development and Refinance Agency Bank is to prepare and launch the policy guidelines and registration and regulation of Micro Finance Institution entities. They are also responsible to run a credit guarantee scheme and create a good architecture to serve micro business by offering financial assistance.
The micro units are further classified based on their growth stage, development and funding requirements. The three categories are as follows:
This category is for the start-ups that have just started out and are looking for loan. Loan cover offered to this category of micro units is Rs.50,000.
This is the category where the business has started but it is yet to be established. The loan cover offered to this category ranges from Rs.50,000 to Rs.5 lakh.
The business that have started and established themselves fall under this category. The loan might be to expand their business or to buy assets, etc. The loan cover offered to this category ranges from Rs.5 lakh to Rs.10 lakh.
The borrowers must be from the following Non-corporate Small Business Segment:
Mudra loan can be availed for the following purposes:
To apply for Mudra Loan for all the categories, you will have to go through the following process:
If the borrower wishes to take a vehicle loan under the Pradhan Mantri Mudra Yojana (Mudra Loan), he must submit the following documents:
If the borrower wishes to take a business instalment loan under the Pradhan Mantri Mudra Yojana, he must submit the following documents:
If the borrower wishes to take a Business Loans group and rural business credit under the Pradhan Mantri Mudra Yojana, he must submit the following documents:
The following details will have to be filled in the Pradhan Mantri Mudra Yojana (Mudra Loan Bank) application form:
The following details must be filled:
MUDRA stands for Micro Units Development & Refinance Agency Ltd, and PMMY stands for Prime Minister MUDRA Yojana. Mudra is being established as a government refinancing and development institution and was announced in the Budget 2016-17. The scheme aims to give funding for non-farm and non-corporate small business entities through intermediaries that include almost all Banks, NBFCs and MFIs operating in India.
Financial support has been found to be lacking for the Non-Corporate Small Business Sector (NCSB) which employs more than 120 million Indians. With 90% of the sector out of the formal finances sector, the informal sector has always been marginalized in the country. The Mudra initiative from the Government of India aims that bridging the gap for financing of NSCB initiatives. Currently, the Mudra falls under SIDBI with plans for enactment of a law for Mudra Bank in the future.
Mudra will be tasked with refinancing needs of NBFCs, trusts, societies, co-operative societies, section 8 companies, scheduled commercial banks, small banks and other rural banks that provide financing to small and micro business entities that are involved in services, trading or manufacture verticals.
Mudra offers three different loan schemes:
All loans up to Rs.10 lakhs that have been sanctioned after 8th April 2015 and for income generating activities other than farm related fall under the PMMY loan scheme.
The scheme has been released by the central government and different financial institutions are tasked to provide the loans as intermediaries. These include Public Sector Banks, Cooperative banks, Regional Rural Banks, Foreign Banks, Private Sector Banks, NBFCs and MFIs.
SLBC forum in each state and Department of Financial Services will oversee operations in the national level. A unified portal for Mudra has already been established for tracking achievement details of all financial institutions that are disbursing loans under the scheme.
The Mudra Card is a comprehensive benefits providing card that offers working capital through CC/OD whenever needed. The card functions as RuPay Debit Card and may be used for withdrawing cash at ATMs or for making purchases through Point of Sale machines. You can also credit money into the card as and when there is surplus funds so as to reduce the quantum of interests.
Any grievance, complaints or feedback can be taken up with the respective bank/NBFC/MFIâ€™s higher authorities such as zonal or regional manager.
You can escalate the grievance to higher authorities within the lending institution or approach any other bank/MFI/NBFC in your neighbourhood.
Check Mudra Loan Interest rates from different Lenders
The interest rates on the Mudra Loans are decided individually by each lender. Check the rates from more than 33 lenders in India here
Know more about Mudra Loan Eligibility
Mudra Loans are meant for entities looking to invest in non-farm income generating activities which includes a broad range of activities and businesses. Check the eligibility requirements here.