The Government wants to promote micro, small and medium industries or MSMEs in India. It achieves this through the Mudra Loan. MUDRA is nothing but the Micro-Units Development and Refinance Agency.
The minimum size of Mudra Loan is Rs 50,000 and goes up to Rs 10 Lakhs offered to start-up firms and small business units. Mudra Loans help small businesses grow and expand and manage operations through easy finance schemes. The focus is on Fund the Unfunded. Through Mudra Loans, the neglected population is made self-reliant and self-dependent.
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Pradhan Mantri Mudra Yojana or PMMY was launched by Prime Minister Narendra Modi on April 8th 2015. Loans of up to Rs 10 Lakhs are offered to small businesses which don’t have access to the formal financial system to grow and expand. Mudra also offers refinance support to a number of banks, MFIs and NBFCs.
Eligibility for Mudra Loan: If you run a small business, you can apply for a Mudra Loan. Loans are offered under 3 different categories:
Shishu: This is for extremely small businesses or business units. It covers loans up to Rs 50,000.
Kishor: This is for slightly bigger business units. This is for loans between Rs 50,000 to Rs 5 Lakhs.
Tarun: This is for much bigger business units. This covers loans more than Rs 5 Lakhs up to Rs 10 Lakhs. Mudra also offers a special refinance scheme for women entrepreneurs called the Mahila Uddyami Scheme.
You have a micro-credit scheme for loans up to Rs 1 Lakh offered through micro finance institutions. You also have a refinance scheme offered for commercial banks and RRBs or Regional Rural Banks. There is also the women enterprise programme and the securitization of loan portfolio.
This is a very innovative product which offers the working capital facility under cash credit management. Mudra Card is a debit card issued against the Mudra Loan Account for working capital portion of the loan. You can operate the Mudra Card across India and withdraw cash from any ATM or Micro ATM. You can make payment with Mudra Card at POS Machines. (Point of Sale Machines).
RuPay Mudra Debit Card: RuPay Mudra Debit Card is a Government of India initiative for the beneficiaries of the Mudra Loan under Pradhan Mantri Mudra Yojana Scheme. You get RuPay Mudra Debit Card with Pradhan Mantri Mudra Yojana Account. It offers working capital facility as cash credit arrangement. RuPay Mudra Debit Card helps manage working capital efficiently and keep the interest burden low.
See Also: Mudra Loan Application Form
The Finance Ministry has a tie up with many e-commerce firms. Some of the prominent names are Ola, Uber, Flipkart and Amazon which offer easy finance to entrepreneurs and small businesses under Pradhan Mantri Mudra Yojana.
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