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All You Need To Know About Pradhan Mantri Mudra Yojana

IndianMoney.com Research Team | Posted On Thursday, March 14,2019, 11:44 AM

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All You Need To Know About Pradhan Mantri Mudra Yojana

 

 

What is a MUDRA Loan?

The Mudra loan is a government scheme that aims to improve the prospects related to micro units. The government has identified the lack of substantial funds required for the growth of small and medium scale businesses in India. The scheme was introduced to support micro, small and medium business units. There are three categories of loans under this scheme that can be availed during fund shortage or for growth and funding requirements by the beneficiary micro units.

MUDRA Loan Interest Rates:

As per the scheme there are three products under the Mudra loan. These are categorized as per the stages of growth of the enterprise. As per the scheme the interest rate and the loan limit depends on the product. They are as follows:

  • Shishu: Under this scheme the maximum loan that can be availed is Rs 50,000 with an interest rate of 12% a year. The tenure of repayment is up to 5 years.
  • Kishore: Under this scheme the loan limit is up to Rs 5 lakhs. The rate of interest depends on the bank from which the loan is availed. The tenure of repayment is decided by the bank.
  • Tarun: Under this scheme the minimum loan amount is Rs 5 Lakh and the maximum amount is Rs 10 Lakh. The period of repayment and the interest rate charged is decided by the bank keeping in mind the credit history of the applicant.

SEE ALSO:  MUDRA Loan

Eligibility Criteria For Mudra Loan:

There are some eligibility criteria that the applicant must fulfill for Mudra loan. They are as follows:

  • The applicant must be a citizen of India.
  • The applicant must be 23 years or above.
  • Funds borrowed must be invested in the business.
  • Business owners, vegetable vendors, shopkeepers, fruit vendors and artisans are eligible for loans under this scheme.

These are some basic eligibility criteria prescribed by the government. The banks and other financial institutions have their own guidelines and parameters for checking Mudra loan eligibility.

MUDRA Loans Basic Eligibility Criteria:

Mudra loan is a government scheme that aims to provide funds to the non corporate small business sector. The category eligible to avail this loan must belong to the following professions:

  • Proprietorship
  • Partnership firms
  • Small manufacturing units
  • Service sector units
  • Shopkeepers
  • Fruit or vegetable vendors
  • Truck operators
  • Food service units
  • Repair shops
  • Machine operators
  • Small industries
  • Other industries in rural and urban areas.

Mudra Loan General Eligibility Requirements:

Mudra loans aim to bring micro units and small enterprises under the formal financial system. The loans can be availed for various purposes like maintenance and upkeep of farms, for purchasing vehicles, to purchase equipment and machinery or for enhancing infrastructure as business loans. Banks facilitate loans under the Mudra scheme as per customer requirements and the loans are collateral free. The following eligibility criteria must be met by the applicant to avail Mudra loans:

  • The applicant must be at least 23 to 28 years while applying for the loan.
  • The monthly income of the applicant must be equal to or above Rs 17,000 or Rs 15 Lakh or more annual turnover of the business.
  • The applicant must be employed and have work experience of a minimum 2 years (for salaried professionals) and 5 years (for self employed individuals).
  • The applicant must have good relations with the bank from which he is applying for the loan.

These loans help businesses and enterprises prosper in the micro units sector and can be availed by the low income group to ease financial shortages in the business.

SEE ALSO:  Mudra Loan Eligibility Criteria

Requisite Documents For MUDRA Loan:

The basic documents required are as follows:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Address proof of business establishment
  • Passport size photographs
  • Rental agreement ( for business established on rented property)
  • Small scale industry registration certificate
  • Partnership deed/ title deed/ lease deeds
  • Income tax statement
  • Bank statement of last 6 months

Apart from the basic documents, the applicant must also submit some requisite documents for loans availed for specific purposes. The documents required are as follows:

Vehicular loan:

If the borrower requires financial help for purchasing a vehicle under this scheme, he must submit the following documents:

  • Mudra loan application form
  • Vehicle loan application form
  • Photo ID proof, Income proof and address proof
  • Last 6 months bank statement.

Business Installment Loan:

If the borrower wishes to take loans for his business under this scheme, he must submit the following documents:

  • Mudra loan application form and business installment loan application.
  • Photo identity proof and address proof.
  • Proof of establishment
  • Last 6 months of bank statements
  • Ownership proof or residential proof
  • Qualification proof
  • Trade references.

Rural Business Credit Loan:

If the applicant applies for rural business credit under the Mudra Loan he must submit the following documents:

  • Mudra loan application form and business instalment loan application form.
  • Photo identity proof, age proof and address proof
  • Ownership proof of residence or office
  • Business establishment proof
  • Last 12 months bank statement
  • Last 2 years income tax return document.

MUDRA Card:

The Mudra card refers to a debit card issued against Mudra Loan account. The card can be operated throughout India for withdrawal of cash and also to make direct payments. The maximum limit that can be withdrawn from ATM using this card is Rs 25,000 in a day.

These are personalized cards that bear the name of the firm or individuals. The card will cover cash credit as well as current deposit accounts. Transaction charges are applied from the first transaction onwards. The RuPay card will have an additional benefit of insurance coverage up to Rs 1 Lakh.

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