Under the Pradhan Mantri MUDRA Yojana scheme (PMMY), the Government of India has designed MUDRA loans to help small business owners in the country and help them meet capital expenses as well as operating costs. The maximum amount that can be borrowed through this loan is Rs.10 lakh. Business owners who require amounts in excess of Rs.10 lakh can avail other business loans offered by banks and financial institutions.
There are three schemes, namely Tarun, Kishor, and Shishu.
These schemes are designed to help in meeting the requirements of different business activities and sectors as well as the requirements of entrepreneur/business segments.
Achievements under the PMMY loan scheme
MUDRA loans can be taken for a variety of reasons that help in creating employment and generating income. Here are the main purposes for which MUDRA loans are taken:
Indian citizens who have their own business plans for service sector activities, or trading or manufacturing activities and require amounts of up to Rs.10 lakh can apply for MUDRA loans. MUDRA loans can be availed from:
Eligibility criteria Scheduled Commercial Banks should meet
|Public Sector Banks||Private Sectors/Foreign Banks||Regional Rural Banks|
|Level of NPA||Level of Net NPAs not exceeding 15%||Level of Net NPAs not exceeding 10%||Level of Net NPAs equal to or less than 3%|
||Net profit for preceding 2 years.|
|CRAR||CRAR as stipulated by RBI|
|Networth||Net-worth above Rs.250 crore||Net worth above Rs.50 crore|
Eligibility criteria Small Finance Bank should meet
|Benchmark for sanctions||Parameters||Benchmark Norm|
|Net-worth||> or=Rs.100 crore|
|CRAR||> or = 15%|
|Gross NPA||< or = 5%|
|Net NPA||< or = 3%|
|External Ratings norm||BBB+ and above|
Eligibility criteria Microfinance institutions should meet
|Eligibility Parameter||Portfolio (AUM including off balance sheet)|
|Small - <Rs.100 crore||Medium - Above Rs.100 crore to <Rs.500 crore||Large - Above Rs.500 crore|
|Type of entity||NBFC-MFI, Society, Trust, or any similar registered entity|
|Vintage||The business must be making profit for the past three years|
|Number of borrowers||Minimum number of borrowers must be 10,000||Minimum number of borrowers must be 30,000||Minimum number of borrowers must be 1,00,000|
|Minimum loan requirement||Minimum loan amount of Rs.50 lakh|
Eligibility criteria Non-Banking Financial Companies should meet
|Parameter||for Assets size >= Rs.500 crore||for Assets size <= Rs.500 crore|
|CRAR||Minimum of 15% as stipulated by RBI|
|Type of NBFC||
|Asset size||Minimum Net owned fund of Rs.20 crore and minimum asset size of Rs.500 crore||
|External rating norms||
Who else can avail this loan?
There are several banks in the public sector as well as the private sector offering MUDRA loans. Here are some of the top lenders and their MUDRA loan offerings:
|State Bank of India||11.25%%||Up to 5 years|
|Syndicate Bank||8.60% - 9.85%||Based on the bank’s terms|
|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%||Up to 84 months|
|Type of loan||Documentation|
|Business Instalment Loan||
|Business Loans Group and Rural Business Credit||
The activities/businesses for which MUDRA loans can be availed under this head include medical shops, boutiques, saloons, gymnasiums, dry cleaning, beauty parlours, motorcycle repair shops, tailoring shops, courier services, photocopying and DTP facilities, etc.
MUDRA offers financing for buying transport vehicles for goods as well as personal transport like auto rickshaws, three-wheelers, passenger cars, e-rickshaws, taxis, etc.
Under the Food Products Sector, MUDRA loans can be availed for activities like achaar making, papad making, jelly or jam making, day-to-day catering, small service food stalls, cold storages, ice cream making units, cold chain vehicles, bun and bread making, etc.
MUDRA loans under this head can be availed by individuals who require financing for running their shops, service enterprises, business and trading activities, and non-farm activities that generate income.
MURDA loans under this head are available for activities such as powerloom, handloom, chikan/zardozi work, khadi activity, traditional printing and dyeing, knitting, computerised embroidery, apparel design, other textile activities for non-garment products, etc.
MUDRA loans can also be availed for bee keeping, pisciculture, livestock, sorting, agriclinics, dishery, etc.
MUDRA loans are extended for the setting up of micro enterprises by buying the necessary equipment/machinery.
MUDRA offers four types of funding support:
1 lakh loan under MUDRA scheme for one woman in every SHG. 70% of beneficiaries under MUDRA scheme are Women
Here are the key features and benefits of MUDRA loan:
1. What kind of clients does MUDRA target?
MUDRA loans are targeted at the Non-Corporate Small Business Segment which consists of millions of partnership firms and proprietorships that operate as service sector units, small industries, small manufacturing units, vegetable or fruit vendors, repair shops, etc. In urban as well as rural regions.
2. Are there any subsidies under the Pradhan Mantri MUDRA Yojana?
No. There are no subsidies under the Pradhan Mantri MUDRA Yojana.
3. Can I avail a MUDRA loan if I have recently graduated from college?
Yes. College graduates who wish to start their own businesses can apply for MUDRA loans. Based on the kind of business you wish to start and the requirements of the project, MUDRA can help you get your business up and running.
4. I am a woman entrepreneur and wish to start my own boutique. Can MUDRA help?
Yes. Women entrepreneurs can make the most of a special refinance scheme offered to women entrepreneurs. The Mahila Uddyami Scheme as it is called, offers an interest rebate of 0.25% when you avail a MUDRA loan from an NBFC or a micro finance institution.
5. Do I need to have a PAN card if I want to avail a MUDRA loan?
PAN cards are not mandatory for those who wish to avail MUDRA loans, but you will have to meet the other KYC requirements set forth by the financing institution.
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