MUDRA Bank or Micro Units Development and Refinance Agency Bank, is a new initiative by the Government of India set up for the development of micro units and refinance of MFIs. This bank has been conceptualized in order to encourage entrepreneurship, by offering funds to the non-corporate small business sector. The MUDRA Yojana was announced by the Finance Minister during FY2016’s Union Budget. According to this scheme, the loan under Pradhan Mantri Mudra Yojana (PMMY) can be availed by any Indian citizen, with a credit requirement of Rs 10 lakh and has a business plan for a non-farm sector income generating activity such as trading, manufacturing, service sector, or processing. A Bank, MFI (Micro Finance Institution), or NBFC (Non-Banking Finance Company) can be approached for availing of MUDRA loans.
The MUDRA Bank covers industries and other service sectors that are operating in rural areas of the country. The schemes are specifically designed for the weaker section of people with good entrepreneur skills who require working capital to start their business. The Yojna also operates a special scheme for women entrepreneurs called Mahila Uddyami Scheme. In order to avail the Mudra loans under PMMY, the usual terms and conditions of the lending agency are applicable. Rates are determined as per the guidelines of the RBI. Here is a list of industries that can avail the MUDRA Bank loan.
The bank offers nominal rates of interest based on the requirement. Here are the interest rates for loans of different schemes provided by the MUDRA Bank:
MUDRA SHISHU Yojana
Banks offer loans up to Rs 50,000 under the Mudra Shishu Yojana. Being a basic scheme, a nominal interest rate of around 10% to 12% is charged for the loan.
MUDRA KISHOR Yojana
A loan amount of Rs 5,00,000 is offered under Mudra Kishor Yojana. Categorized as unsecured loan and being a middle scheme the rate of interest ranges from 14% to 17% depending on the bank, where loan is availed.
MUDRA TARUN Yojana
The last scheme offered is the Mudra Tarun Yojana, where a loan amount of Rs 5,00,001 to Rs 10,00,000 can be availed. An unsecured loan, this comes with an interest rate of 16% and may vary according to the bank approached.
This was all about the industries covered by the MUDRA Bank and interest rates offered on the loan scheme. In order to avail a loan, all essential details should be furnished to the bank for a seamless procedure.
The banks that are officially approved to offer Business Loans should meet the following criteria according to their category. The following criteria also applies to microfinance and small business companies.
Scheduled Commercial Banks –
Regional Rural Banks –
The banks that are currently offering business loans under the Pradhan Mantri MUDRA Yojana have interest rates ranging from 11% to 37%. Some of the more popular banks that are offering MUDRA loans are as follows –
Apart from banks, certain micro finance institutions (MFIs) and non-banking financial companies (NBFCs) also offer MUDRA loans. Here is a list of the organizations:
These were some of the institutions that offer PMMY loans to small businesses across the countries. The list of organizations, however, are subject to change as per the Government’s directive. Hence, it is always essential to check if the bank or micro-finance institution is offering MUDRA loan, before approaching it.