On 8th April 2015, the government of India established a flagship artifice called Prime Minister Mudra Yojana(PMMY) to extend accessible loans to the non-corporate, non-farm micro and small enterprise to cater to their funding needs. One of the major aims of MUDRA loans is to target the audience into formal financial folds.
What is Mudra?
The full form of Mudra is Micro units Developments and Refinance agency and it is known to be a refinancing institution that can provide loans up to 10 lakh maximum to the eligible enterprises through commercial banks, Co-operative banks, NBFC and NFI. Here the loan appliers can contact the nearby branches of lending institutions or apply for Mudra loans under the Mudra scheme and you can apply it online.
What is the mission of Mudra?
Prime Minister Mudra loan is to create a comprehensive value-based entrepreneurial culture which is reasonable in partnership with the financial institutions which helps in achieving financial security and make it a grand success
Key features of Mudra:
- There is no need to provide any collateral or security to avail Mudra loan
- Processing charges are zero for availing this loan
- This does not prescribe any minimum amount.
- This loan can be provided for a funded and non-funded category, that induces flexibility.
Mudra Loan Details:
Mudra loans come under three category
Sishu: This is meant for entrepreneurs who want to start their business at on small scale. The maximum loan amount that can be obtained with this scheme is 50000. The norms for the loan is Provide valid quotation and the details of the supplier are essential
This scheme is for people who are looking to expand their business and this scheme offers a loan amount from 50000 to 500000. For this loan, you need to submit your previous two years’ bank statement and income and sales return.
This is for people who are well established in the business and still looking forward to growing the business. This type of loan lies in the range of 500001 to 100000. The documents required for this scheme are very stringent.
Eligibility for Mudra loans:
The eligibility criteria for mudra is as follows
- The people who are engaged in income generation through manufacturing and trading and services.
- People who are engaged in agricultural service since the year 2016 April 1st
- The maximum credit amount for this loan is 10 lakhs INR
The other features of MUDRA schemes are:
- In this scheme, there is no minimum loan amount.
- In this scheme, the maximum loan amount that can be obtained is 10 lakh.
- No security or collateral documents are required for this scheme
- It has no processing fees
- This scheme, helps small entrepreneurs to grow at a bigger rate with low interest
- In this scheme, the primary loan facility is extended to non-corporate enterprises and make their business grow.
- The loans can be in the form of an overdraft facility, bank guarantees and this helps in arranging a wide array of requirements.