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    Mudra Loan Interest Rates 2019

    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.

    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

    Mudra Loan Scheme Limits

    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.

    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.

    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.

    Mudra Loan Interest rates Reviews

    • Bank Bazaar Personal Loan
      "Best service"
      0.5 4.0/5 "Great!"
      I came to know about bank bazaar service through on line,like i was checking for my credit report and i have applied through it, and i am happy with their service, i have been using this bank bazaar service beyond one year, and i have been using mobile application it is user friendly application.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 16, 2019
    • Tata capital Personal Loan
      "Average service"
      0.5 3.5/5 "Pretty good"
      I have applied for Tata capital for an personal loan .Their was clear misunderstanding between the bank, like i have applied for 2,50,000 as an personal loan and they thought i am asking for an top up so they have given me just 1,50,000 ,and 1,00,000 they took as closure of that loan, and the rate of interest they have charged me 10.99% which was nominal,and even processing fee they have charged me was nominal, and the loan was on time.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 16, 2019
    • IDFC Bank Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan with IDFC bank from last 5 years, the loan amount was for Rs 6 lacs with tenure period of 5 years. Customer service was good and they collected documents on time. The rate of interest was nominal when compared to other banks.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 16, 2019
    • Citibank Personal Loan
      "Instead of top up they can provide new loan"
      0.5 4.0/5 "Great!"
      CITI bank personal loan have only top up facility. The interest rates were fair and the processing fee was 1% which is good. They have sanctioned the loan within few hours. I have not faced any issues in this loan. Total tenure period of the loan is 14 months.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 16, 2019
    • HDFC Bank Personal Loan
      "Reduce the interest rate"
      0.5 5.0/5 "Blown Away!"
      HDFC interest rates are more compared to other bank but we can able to get the loan in seconds by using their app. The service has been fantastic. They have offered me a rate of interest which is 11% but they have increased upto 17% which is showing in the app and they are providing the loan without any documents.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 16, 2019
    • RBL Bank Personal Loan
      "Friend in need"
      0.5 5.0/5 "Blown Away!"
      RBL personal loan services are fantastic. The loan is getting over in few months. They have sanctioned the loan immediately and they have given me loan amount of my credit limit. Total tenure period of the loan is 12 months. Interest rates are fine and processing fee was 2% which is too high. I never had any issue with them.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 16, 2019
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a personal loan with HDFC bank and my experience was good, the loan amount was sufficient and the rate of interest was nominal when compared to other banks. Customer service was good and they responded on time. Tenure period for this loan is 5 years and i preclosed the loan in 3 years with nominal preclosure charges.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 15, 2019
    • review Personal Loan
      "Not satisfied with the service "
      0.5 1.0/5 "Really Bad"
      Based on my previous experience with Bajaj for consumer loan based on that i have taken personal loan where they given some high rate of interest than what they promised for. They have high charges for the processing and documentation . Overall am not happy with their financial service.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
    • 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 which they have provided . There is processing fees for the loan which is nominal one and its been refunded . I make the payments through Ecs every month . They gave the tenure period of 2 years . They did quick documentation and received the loan.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
    • HDFC Bank Personal Loan
      "Best financial Service "
      0.5 5.0/5 "Blown Away!"
      I Have taken personal loan from the Hdfc bank , they have given good rate of interest which is satisfactory . There is nominal charges for the processing for approval and documentation . Am satisfied with the customer service as they have explained the terms and condition for the loan .
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
    • HDFC Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a very good experience i had with this loan where the process in getting this loan was quite simple. The loan amount was sufficient and the interest rate with them has been nominal as well. There has not been any sort of additional charges which they had made so far. Overall it had been a very good experience.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 15, 2019
    • ICICI Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I had applied for ICICI personal loan and to get my application processed it took only 7 days .Loan amount was credited with in an hour. It was a super fast loan application process with zero documentation. The tenure period is 4 year and i am happy to have their services .
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Feb 15, 2019
    • Fullerton Personal Loan
      "Interest should come down"
      0.5 2.0/5 "Expected more"
      Fullerton gave me the 28% of interest rate duration for the amount of five years, the loan amount was around Rs. 2.11 lakhs, the process was easy, concern about the interest, they should reduce the percentage as per the market. But the customer satisfactory is not good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Feb 15, 2019
    • ICICI Bank Personal Loan
      "Nice experience"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan from ICICI Bank and the process to get the loan is good and smooth. The customer services and response is good and the documentation process is satisfactory too. The after loan services are good and the interest rate and charges is fine too.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 15, 2019
    • HDFC Bank Personal Loan
      "Quick and Hassle free loan experience"
      0.5 5.0/5 "Blown Away!"
      Being a customer I got the attractive interest rate of 10.5% on my personal loan, I took the loan of Rs. 20 lakhs for the tenure period of Rs. 5 lakhs, I went to the bank I approached for the loan products on time they sanctioned within a day I got the money.
      Was this review helpful? 0
      , lucknow
      Reviewed on Feb 15, 2019
    • Axis Bank Personal Loan
      "Need improvement on statement"
      0.5 5.0/5 "Blown Away!"
      I think 4 to 5 months I have been using AXIS card,the procedure was very simple to avail the card, I received the card on time, the customer service is genuine and they are explaining keen about the billing, its a life time free card. But I have not received the bank statement only I used get the sms.
      Was this review helpful? 0
      , lucknow
      Reviewed on Feb 15, 2019
    • Axis Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been an excellent experience i had with them in getting my personal loan through them and they are one the best banks in getting the personal loan. The process has been simple and the loan amount has been sufficient as well. There has not been any foreclosure charges of part payment charges which they had made as well.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
    • HDFC Bank Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      It was a very good experience i had with the services of them where the process in getting this loan was very quick and simple. The loan amount was sufficient and the interest rate with them has been nominal as well. There has been foreclosure charges with them, their customer support has been helpful at times.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
    • Bank Bazaar Personal Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      Bankbazaar has a quick process for personal loan and credit cards. Past 2 years, i have been using this website. Through online, i have come to know about the website. Totally its a paperless process. Support team has given me a proper guidance regarding the loan process.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
    • HDFC Bank Personal Loan
      "Good Loan service"
      0.5 5.0/5 "Blown Away!"
      There is no particular reason for choosing the HDFC but i have received a message stating that its a pre-approved loan. They have offered me a interest rate of 17% which I'm not satisfied with it. I paid the processing fee of Rs. 3000 and they have sanctioned the loan on time. Since i related with HDFC, i have not submitted any documents except ID proof.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 15, 2019
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