Mudra Loan Scheme
The Pradhan Mantri MUDRA Yojana (PMMY) was introduced by the Hon’ble Prime Minister on April 8, 2015. This scheme aims to offer loans of up to 10 lakh to small and micro enterprises that are non-corporate and non-farm in nature. These loans fall under the category of MUDRA loans within the PMMY framework.
The MUDRA Loan Scheme, under the Pradhan Mantri Mudra Yojana (PMMY), is designed to support micro-enterprises and individuals engaged in income-generating activities. It addresses the financial needs of over 5.77 crore small and micro units in India, which employ approximately 12 crore people, with a significant portion owned by individuals from marginalized communities. These
units often operate outside the formal banking system and face challenges in accessing credit, leading them to rely on informal sources or limited personal fund.
The objective of the MUDRA Loan Scheme is to bridge this gap by providing loans of up to ₹10 lakh to micro enterprises in manufacturing, trading, and services sectors. These loans are extended by banks, NBFCs, MFIs, and other eligible financial intermediaries identified by MUDRA Ltd. Additionally, overdraft amounts of ₹5000 sanctioned under the PMJDY are also classified as MUDRA loans under the Prime Minister MUDRA Yojana (PMMY).
Categories of Mudra Loans
Benefits of Mudra Loans
- No requirement for collateral or third-party security to access any of the Mudra schemes.
- Affordable Mudra loan interest rates, which do not exceed 1% per month.
- Easy withdrawal of the sanctioned amount using a Mudra loan card, eliminating the need for physical visits to the bank.
FAQs
The Pradhan Mantri MUDRA Yojana (PMMY) is a government scheme introduced on April 8, 2015, aimed at providing loans of up to ₹10 lakh to small and micro enterprises that are non-corporate and non-farm in nature. These loans are categorized as MUDRA loans within the PMMY framework.
Micro enterprises engaged in income-generating activities in manufacturing, trading, and services sectors are eligible for MUDRA Loans. These enterprises may include individuals from marginalized communities and typically operate outside the formal banking system.
The benefits of MUDRA Loans include:
- No requirement for collateral or third-party security.
- Affordable interest rates not exceeding 1% per month.
- Easy withdrawal using a Mudra loan card, eliminating physical visits to the bank.
- Maximum tenor of 36 months for repayment.
MUDRA Loans are offered by Public Sector Banks, Private Sector Banks, Micro Finance Institutions (MFIs), and Regional Rural Banks (RRBs) identified by MUDRA Ltd.
The documents required for MUDRA Loans include:
- Proof of identity
- Proof of residence
- Business proof
- Application form and passport size photos
- Caste certificate (if applicable)
- Other documents like quotations for commodities or items to be bought for the business
- Compulsory filing of Income Tax Returns (ITR) for the past 2 years
The interest rates for MUDRA Loans depend on the profile of the applicant and are decided by the lender after scrutinizing the business requirements.
Activities covered under MUDRA Loans include:
- Food products sector
- Transport vehicles for goods and passengers
- Social, personal, and community service activities
- Business loans for shopkeepers and traders
- Textile products sector activities
- Agriculture-related activities
- Equipment finance scheme for Micro Units