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    Mudra Loan Interest rates

    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.

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    Pradhan Mantri Mudra Yojana (Mudra Bank Loan) Interest rates

    Mudra Loan Interest rates

    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

    1. Shishu – Loans up to a maximum of INR 50000 with rate of interest being 1% per month or 12% per annum. Repayment period up to 5 years
    2. Kishore – Loans exceeding INR 50000 up to INR 5 lakhs. The rate of interest will be dependent on the bank, in accordance with the schemes guidelines, keeping the credit history of the applicant in view. Repayment period based on the discretion of the bank
    3. Tarun – Loans exceeding INR 5 lakhs up to INR 10 lakhs. The rate of interest will be dependent on the bank, in accordance with the schemes guidelines, keeping the credit history of the applicant in view. Repayment period based on the discretion of the bank

    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.

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    Mudra Loan Interest rates 2018 (Updated)

    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
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    Highlights of the 2018-19 Union Budget on Pradhan Mantri Mudra Yojana (PMMY) or Mudra Loan

    The 2018-19 Union Budget meeting, led by the Finance Minister of India - Mr. Arun Jaitley, was commenced on 1 February 2018. To improve the financial condition of the country, this meeting focused on multiple sectors such as Micro, Small, and Medium Enterprises (MSME), agriculture and rural economy, infrastructure, finance, health, social security, education, tax, and others. The minister also concentrated on Mudra Loan offered under the Pradhan Mantri Mudra Yojana (PMMY).

    Since its inception in April 2015, a total of 10.38 crore self-employed individuals have availed the benefits of Mudra Loan by withdrawing a total credit of Rs.4.6 lakh crore. Out of the total number of loans, 76% of the loan accounts belong to women while over 56% belong to individuals who are SC, ST, or OBC. As the scheme has exceeded the targets set for all the previous years, the Government has decided to set the target for Mudra Loan during the upcoming financial year of 2018-19 at Rs.3,00,000 crore.

    The meeting also indicated that this year’s focus will be on Non-Bank Finance Companies (NBFC). When the MSMEs were struggling to receive financing after the country was hit by demonetisation, the NBFCs of India had stepped up to the task and provided financial aid to many. This not only helped MSMEs receive the monetary relief they required during a their time of need, but also proved that NBFCs are powerful vehicles that can be used to provide Mudra Loans to the masses. Keeping this in mind, the Finance Minister has also announced during the Union Budget that the eligibility criteria and refinancing policies for NBFCs will be reviewed to offer them better chances of providing loans.

    In addition to MSMEs, Mudra Loans of Rs.10 lakh can also be availed for non-agricultural activities or projects that are partially aligned to agriculture such as poultry, dairy, bee keeping, and many more. Depending on the growth stage and credit requirements of the micro, small, or medium enterprise, an entrepreneur can avail 3 types of loans under PMMY - Shishu, Kishor, and Tarun.

    Mudra Loan Interest rates FAQs

    1. What is the interest rate under the Mudra/PMMY Scheme?

      Interest rates are dynamic and decided by the lending institution under broad guidelines from the RBI so as to keep the products cost effective.

    2. What is the target audience for Mudra Scheme?

      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.

    3. Why are the interest rates different for different institutions?

      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.

    4. Are the loans subsidised by the central government?

      No, these loans are not subsidised by the central or state governments.

    5. What does the Mudra application form look like?

      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.

    6. Where can I find the Mudra Loan application forms?

      You can find the application forms online on the Mudra website or get one from any of the intermediaries.

    7. What is the repayment criteria for Mudra Loans?

      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.

    8. Do all banks in India fall under the Mudra Scheme?

      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.

    9. Is the PMMY Scheme active now?

      Yes, the scheme has been active since April 8th 2015 throughout the country.

    10. How long is the processing time for Loans under the Mudra Scheme?

      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.

    Mudra Loan Interest rates Reviews

    • Bajaj Finserv Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I have take personal loan from the Bajaj finance which they approved in 2-3 day and the amount is reflected in next day ,its instant approve process. As am satisfied with the rate of interest which is quiet nominal one They provided the tenure period of 1-5 year and i make the payment monthly though ECS There is nominal processing fees also,
      Was this review helpful? 1
      , chennai
      Reviewed on Oct 17, 2018
    • HDFC Bank Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I have taken personal loan from Hdfc bank . Am satisfied with the rate of interest which they have provided Is high . There is nominal processing fees for the loan which is nominal one. I make the payments through Ecs every month. They did quick documentation and received the loan.
      Was this review helpful? 0
      , chennai
      Reviewed on Oct 17, 2018
    • Bank Bazaar Personal Loan
      "Experience is good"
      0.5 5.0/5 "Blown Away!"
      There were no issues or delay at Bankbazaar.com, the customer support was on time to contact me and inform me the details. The website is also good and it is informative too. It was a hassle free experience and in all a smooth process. There were follow up calls too.
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2018
    • Incred Personal Loan
      "High on ROI and charges"
      0.5 5.0/5 "Blown Away!"
      InCred experience is good when it comes to the personal loan. They were on time and the documents were also collected on time. I got the loan amount as they needed. The rate of interest is too high. It is of 21% and the processing fee is also high. It is recommendable for an emergency.
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2018
    • review Personal Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan from Ujjivan small finance bank. There was no processing charges and the rate of interest is around 12.5%. The process is good, but the only thing is the loan amount is maximum of 50K. Overall it has been a good experience.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 17, 2018
    • Bank Bazaar Personal Loan
      "Overall good"
      0.5 4.0/5 "Great!"
      Bankbazaar.com is very good in my point of view. They have contacted me immediately and there was no delay and there were follow up calls too in the process. The website is easy to use and check the banks. One thing is, it would be better if I am provided with the customer care number of the bank. So if the bank is delaying in the process, the customer can contact the bank directly and check.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 17, 2018
    • Incred Personal Loan
      "ROI is very high"
      0.5 1.5/5 "Bad"
      I have taken a personal loan from InCred and it is good but not as expected. I was expecting the loan within two to three days, but it took 15 days. I had applied for a medical issue. The rate of interest is very high, it is of 28%. The processing charges is also, it is 3%. The loan amount was as per my request.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 17, 2018
    • review Personal Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken with BAJAJ FIN INSTITUTION , The process was very smooth i got my loan within few days . There is no charge for foreclosure but rate of interest is too high with this bank . Overall it has been very good experience with BAJAJ ALLIANCE
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Oct 17, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It has been a good experience in getting a personal loan from them where the process in getting the loan had been smooth and easy. The loan amount which they had provided had been sufficient and fulfilled the requirements. The interest rate with them was also not too high compared with the market rate.
      Was this review helpful? 1
      , kolkata
      Reviewed on Oct 17, 2018
    • HDFC Bank Personal Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken with HDFC BANK , they charged 10.99% rate of interest and they have not Charge processing fee with this bank . I got best service through this bank the process was very smooth and easy . They provide me sufficient tenure period .
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Oct 17, 2018
    • Bajaj Finserv Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The experience i had with this loan has been good and they had given me a loan amount of 5,00,000 which has been satisfactory. The interest rate with them has been okay but there has been charges made by them which was not even intimated. They had promised something and had taken something.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2018
    • ICICI Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken my personal loan from ICICI bank, i am satisfied with my loan amount which they have provided to me and even they charge nominal rate of interest and even processing fee which they charge was normal, i did not found any difficulty in getting my loan approval it run very smoothly.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 16, 2018
    • SBI Personal Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken from the STATE BANK OF INDIA and it got approved very quick also the process of getting the loan is is easy and good. I have got the sufficient amount of personal loan. The service is good and responsive also added on that it is good to use.
      Was this review helpful? 3
      , chennai
      Reviewed on Oct 15, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I know bankbazaar.com from last 6 months but i am using the service from last 5-6 months. Customer service is good with bankbazaar and their response was on time.Both mobile app and the website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 4
      , noida
      Reviewed on Oct 15, 2018
    • IndusInd Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      My personal loan application was approved with IndusInd bank and the experience was good, the process was quick and i received my credit card within 2-3 days. The loan amount was for Rs 2 lacs with nominal interest rate when compared to others. Customer service was good and they responded on time.
      Was this review helpful? 2
      , noida
      Reviewed on Oct 15, 2018
    • Bajaj Finserv Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      The process in getting this loan has been smooth and easy and the loan amount which they had provided had been satisfactory. They had been charged me with some processing fee but there has not been any sort of additional charges. The interest rate which they offered also had been good where it was comparatively less.
      Was this review helpful? 2
      , bangalore
      Reviewed on Oct 15, 2018
    • Capital First Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      It has been a good experience in getting this loan from them. The loan amount which they had provided had been satisfactory and the interest rate with them has also been good when compared with the market rate, there has been some processing fee which has been charged by them but it has been nominal. Overall it was a good experience.
      Was this review helpful? 2
      , bangalore
      Reviewed on Oct 15, 2018
    • ICICI Bank Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I have taken personal loan from Icici bank , Am satisfied with the rate of interest of 10.99% which is low where no other bank will give for such low interest with nominal processing fees. They instantly approved .Their customer executive used to call for the offers if any offers goes around.
      Was this review helpful? 2
      , coimbatore
      Reviewed on Oct 15, 2018
    • Axis Bank Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      Applied a personal loan with AXIS bank, i was in a urgent need and my application was processed in a week time. I find the interest rates very high here The sales person didn't gave me any idea on interest rates, as i was needed money for a medical urgency i didn't inquired for interest rate. But now its been 3 months and i feel like its very high.Have taken amount of 3 laks, would wish if the rates come down, it will be a great relief.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Oct 15, 2018
    • Fullerton Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I had taken my personal loan fom Fullerton India and it has a good experience i had with them . i am satisfied with loan amount which they have given to m and even i am happy with tenure period as well,they rate of interest and the processing fee is nominal they have charge me.
      Was this review helpful? 2
      , kolkata
      Reviewed on Oct 15, 2018
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