Pradhan Mantri Mudra Yojana is a special scheme set up by the Government of India through an institution named Micro Units Development & Refinance Agency Limited (MUDRA) in order to provide financing aid through loans to the non-corporate non-farm sector income generating activities of micro and small entities (subject to those enterprises with credit needs below INR 10 lakhs).
The Pradhan Mantri Mudra Yojana (PMMY) has three facilities or options available for catering to enterprises at different stages of growth and financing needs. These options are Shishu, Kishore and Tarun.
The loans availed as per this scheme can be used for multiple purposes, like vehicle loans for automobiles meant for commercial purposes, business instalment loans that can aid in working capital financing / purchase of plant and machinery / renovating the infrastructure and/or business loans group and rural business credit.
As per the financing options available under the scheme, the interest rates and loan limits vary to accommodate for the growth stage of the concerned enterprise availing the loan. As of November 2015, the applicable rates and limits are as follows
It is clear from the above mentioned points that the first option which caters to budding businesses has the most affordable rates and a fixed repayment term irrespective of the applicant’s or the business’ performance and history. The above, however are subject to change based on the scheme’s guidelines.
A total of 27 Public Sector Banks, 17 Private Sector Banks, 31 Regional Rural Banks, 4 Co-operative banks, 36 Microfinance Institutions and 25 Non-Banking Financial Institutions have currently been selected to allow disbursement of this loan. 60% of the loans under this scheme are set to be offered through the ‘Shishu’ option and the rest 40% will be through the ‘Kishore’ and ‘Tarun’ schemes.
|Mudra Loan Bank||Interest rate||Tenure|
|HDFC||12.75% to 20%||1-5 years|
|HDBFS||15.95% to 18.95%||1-3 years|
|Tata Capital||13.49% to 19.50%||1-5 years|
|Kotak Mahindra Bank||11.5% to 18%||1-5 years|
|Capital First||13% to 20%||1-5 years|
|Citibank||12.75% to 15.75%||1-5 years|
|IndusInd Bank Ltd||12.99% to 18.25%||1-5 years|
|Fullerton||19.50% to 37%||1-4 years|
|Standard Chartered Bank||12.50% to 17%||1-5 years|
|ICICI Bank||11.49% to 17.50%||1-5 years|
|Aditya Birla Finance Ltd||14%||1-3 years|
|Allahabad Bank||13.70%||1-5 years|
|Bank of Baroda||14.15%||1-3 years|
|Bank of Maharashtra||15.20%||1-3 years|
|Bank of India||12.7% to 14.7%||1-3 years|
|Canara Bank||13.65%||1-3 years|
|Central Bank||12.70%||1-3 years|
|Dena Bank||13 % to 14%||1-3 years|
|IDBI Bank||12.75% to 13.75%||1-5 years|
|Indian Bank||12.65% to 13.65%||3 years|
|Indian Overseas Bank||14.70%||1-5 years|
|Karur Vysya Bank||13.9% to 16.40%||1-3 years|
|Oriental Bank of Commerce||11.2% to 12.95%||1-5 years|
|South Indian Bank||14.80%||1-4 years|
|State Bank of Bikaner and Jaipur||13.2% to 14.2%||1-5 years|
|State Bank of Hyderabad||15.25% to 15.75%||1-3 years|
|State Bank of India||17.80%||1-4 years|
|State Bank of Mysore||16.90%||1-3 years|
|State Bank of Patiala||12.65% to 14.65%||1-5 years|
|State Bank of Travancore||13.2% to 13.45%||1-5 years|
|Tamilnad Mercantile Bank||14.4% to 16.4%||1-5 years|
|UCO Bank||14.1% to 15.1%||4-5 years|
|Union Bank of India||14.4%||1-5 years|
|Vijaya Bank||13.7%||1-5 years|
While presenting the changes made in the Union Budget Meeting 2017-2018, the Finance Minister of India, Arun Jaitley announced that the lending target under the Pradhan Mantri Mudra Yojana has been doubled and is fixed at Rs.2,44,000 crore. Pradhan Mantri Mudra Yojana is a scheme under the Micro Units Development and Refinance Agency Bank which was set up for developing and refinancing the micro units in India. The Finance Minister further stated that the scheme is performing really well in terms of funding the unfunded and the under-funded micro units in India. This time, priority will be given to Dalits, tribals, backward classes, women, and other minorities. During the meeting, Arun Jaitley also spoke about the Stand Up India Scheme which was set up to encourage tribal, women, and Dalit entrepreneurs to set up greenfield enterprises across the country. He said that so far the scheme has attracted 16,000 new enterprises in various sectors like food processing, garment industry, and others.
Interest rates are dynamic and decided by the lending institution under broad guidelines from the RBI so as to keep the products cost effective.
Mudra is targeted at Non-Corporate Small Business (NCSB) segment that includes business entities such as small manufacturing plants, shopkeepers, service sector installations, vegetable/fruit vendors, repair shops, truck operators, food-service units, artisans, machine operators, small industries, food processors etc.
Mudra loans are unsecured in nature as no collaterals are required to avail the loan. This is a reason why interest rates vary from institution to institution as every organization calculates the risk factor on its own and establishes rates accordingly.
No, these loans are not subsidised by the central or state governments.
For the starting category of Shishu Loans, a 1 page application form needs to be duly filled and submitted. For Kishor and Tarun categories of loans, a 3 page application form needs to be submitted.
You can find the application forms online on the Mudra website or get one from any of the intermediaries.
The repayments terms and conditions are decided by the intermediary lending institution according to its rules considering the cash flow of the business in question.
Yes, the Department of Financial Services (DFS) has already sent advisories to Public Sector Banks, Scheduled Commercial Banks and Regional Rural Banks for bringing all loans up to Rs.10 lakhs disbursed for non-farm income generation activities after April 7th 2015 under the Mudra Scheme. The DFS has also instructed all banks to provide loans under the scheme and put targets per branch.
Yes, the scheme has been active since April 8th 2015 throughout the country.
Lower amount Shishu loans are generally disbursed within 7-10 days while the other categories have processing times varying from lender to lender.
Know more about Mudra Loan
Mudra loan is a new scheme from the Government of India that aims to rejuvenate the refinancing sector for micro units enterprises. Learn more about the Mudra Bank Loan here.
Know more about Mudra Loan Eligibility
Mudra loans come with minimal eligibility requirements as the aim is to empower the business community at the margins. Learn more about the eligibility requirement for Mudra Loans here.
Balbir Singh Sidhu, the Local Legislator of Mohali, recently addressed a consultative committee meeting of banks which was held at a district-level. During his speech, he mentioned that all banks must offer loans to youth for self-employment purposes. He also mentioned that these banks should spread awareness about Rupay Card Jan Suraksha Yojna, Pradhan Mantri Mudra Yojna, Atal Pension Plan, Avaas Yojna, National Urban Livelihood Mission, Pradhan Mantri JanDhan Yojna, RSETI, Self Help Groups, Stand up India Program, etc. Gurpreet Kaur Sapra, Deputy Commissioner, stated that camps for financial awareness and financial education should be conducted in villages on a regular basis and detailed reports about these camps should be sent to the office of the deputy commissioner.
15th September 2017
The CEO of Micro Units Development & Refinance Agency Ltd (MUDRA) said that the organisation is soon going to have an online platform in order to assist micro units obtain MUDRA loans for their multiple activities and processes. This online platform intends to make the application process for MUDRA loans convenient and quick. It also has an exclusive analytics tool that supports lenders in acquiring proper information about borrowers. During this fiscal period, the organisation disbursed loans worth Rs.70,000 crore. The target for disbursal of MUDRA loans is fixed at Rs.2.44 lakh crore. The CEO of MUDRA said that this target is easily attainable.
12th September 2017
According to the latest data released by Finance Ministry, around 78% of all Mudra loans beneficiaries are women entrepreneurs. They have received half of the Rs.3,55,590 crore that has been sanctioned under the scheme till date. Loans amounting to Rs.1,78,313 crore has been sanctioned to self-employed women running businesses such as food parlours, bakeries, paper products, personal care and hairdressing, etc. 23% of the sanctioned loan went to people from the OBC section, 10.5% to people identifying as SC (scheduled castes), and 3% to people from ST (scheduled tribes). The Pradhan Mantri Mudra Yojana (PMMY) Scheme, extends loans to small and micro businesses via banks, Microfinance Institutions (MFIs) and Non-Banking Financial Companies (NBFCs), providing loan amount of up to Rs.10 lakh for manufacturing, trading, processing, and agriculture allied services/activities. In the 2016-17 fiscal year alone, Rs.1,80,528 crore has been sanctioned under PMMY, exceeding the target of Rs.1,80,000 crore.
2nd August 2017
In Nagpur district, loans worth Rs.925 crores is sanctioned to more than 2.75 lakh small entrepreneurs under the Mudra (Micro Units Development and Refinance Agency) Yojana scheme introduced by the Prime Minister of India in April last year. Sachin Kurve, District Collector, stated that the nationalised banks have been motivated to provide these loans under the Mudra Scheme to youths in the country for starting new businesses. Under this initiative, loans ranging from Rs.50,000 to Rs.10 lakh are provided to budding entrepreneurs who wish to start a range of business including honey bee breeding, dairy products, and agri-based industry. This initiative aims at funding the 65% of the Indian population who are less than 35 years of age to start a new business.
27th March 2017
The Union Minister Smriti Irani unveiled a new portal that would enable banks to provide financial assistance through the Mudra (Micro Units Development and Refinance Agency) loan to handloom weavers electronically. Banks will credit the loan amount directly to the accounts of the beneficiaries. The credit guarantee fee and interest subvention will also be deposited to the bank account. The portal will be functional from 1st April, 2017, and it will enable weavers to keep a track of their loan applications. Efforts are on to link all banks to the portal.
The portal has been developed by the Ministry of Textiles, in alliance with the Punjab National Bank. Irani pointed out that women form a large portion of the beneficiaries under the Mudra loan scheme. RuPay cards are issued to beneficiaries to help them withdraw a loan amount up to Rs.50,000
10th March 2017
he Pradhan Mantri Yojana target has been doubled to Rs.2,44,000 crore. He quoted that there has been a significant contribution from the scheme to the funding of the under-funded and unfunded. The scheme exceeded last year’s target of Rs.1.22 lakh crore. Mr. Jaitley also added that tribals, backward classes, Dalits, women, and minorities will be given priority. He also said that more than 16,000 new enterprises have risen in diverse activities like garments, food processing, diagnostic centres, etc. with the help of the Stand up India scheme.
3rd February 2017
Bank of Baroda, which is mainly occupied in providing services such as corporate banking, international banking, personal banking, and treasury services apart from various other services, has opened a new branch in Whitefield, Bengaluru. K. Venkateswarlu, General Manager of Bengaluru zone, inaugurated the new branch. Holding a solid domestic existence with 5,377 branches and 8,975 ATMs, Bank of Baroda is looking forward to serving people with various banking solutions.
18th January 2017
Under the Pradhan Mantri Mudra Yojana (PMMY), commercial banks operating in the state of Odisha have sanctioned and disbursed MUDRA loans amounting to Rs.5,436 crore in 2015-16. The MUDRA loan scheme consists of three different segments: Sishu, Tarun and Kishore. So far, 23.43 lakh people have benefited from the loan scheme. Dharmendra Pradhan, Minister of State for Petroleum and Natural gas, has expressed his disappointment in the performance of the private banks, regional rural banks and public sector banks in disbursing small loans when compared to the performance of non-banking financial companies and micro finance institutions. Data indicates that only 35% of small loans have been disbursed to poor entrepreneurs. The Union Minister has now directed banks to increase the credit to women, youth and poor entrepreneurs. The target percentage to achieve in this financial year is at least 45%.
21st November 2016
The Indian Government in consultation with the Jammu and Kashmir government has organized a drive for the financial inclusion of every district in the state under the Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Yojana, Atal Pension Yojana, Pradhan Mantri Suraksha Bhima Yojana and Pradhan Mantri Mudra Yojana. The drive will be in effect till the 31st of October 2016. The interested parties in these schemes can contact their respective Deputy Commissioners or the Lead Banks for more information.
24th October 2016
Based on statistics from the district administration of Pune, 54,000 applicants have applied for the MUDRA (Micro Units Development and Refinance Agency Bank) scheme and a total of Rs.995 crore has been disbursed under the scheme. MUDRA scheme is a government scheme introduced to develop micro units by offering refinancing options, in order to encourage entrepreneurship. The rural areas in Pune have displayed a good response for all the three schemes (Shishu, Kishore, Tarun). Despite the response, Pune district administration officials intend to educate more people about the scheme, and spread awareness on the same, so that more people can avail the benefits of the Mudra scheme.
22nd September 2016