Pradhan Mantri MUDRA Yojana get upto Rs.10 Lakh for your business

Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime Minister on April 8, 2015 for providing loans up to 10 lakh to the non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.

The borrower can approach any of the lending institutions mentioned above or can apply online through this portal www.udyamimitra.in . 

Under the aegis of PMMY, MUDRA has created three products namely ‘Shishu’, ‘Kishore’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth.

Advantage

Under the PMMY, loans are categorized into three segments:

• Shishu: Loans up to ₹50,000.
• Kishor: Loans ranging from ₹50,001 to ₹5,00,000.
• Tarun: Loans ranging from ₹5,00,001 to ₹10,00,000.

These loans are provided through various financial institutions such as banks, non-banking financial companies (NBFCs), and microfinance institutions (MFIs). The scheme aims to promote entrepreneurship, generate employment, and facilitate the growth of the micro-enterprise sector in India. It has been instrumental in providing financial support to millions of small business owners across the country.

Eligibility

• Individuals: Any individual looking to start or expand a small business venture can apply for a Mudra loan.
• Proprietary Concern: Sole proprietors who operate their businesses under their own name or trade name are eligible.
• Partnership Firm: Partnerships involving two or more individuals coming together to operate a business are eligible for Mudra loans.
• Private Limited Company: Private limited companies, which are privately held entities, can also apply for Mudra loans to support their business activities.
• Public Company: Public limited companies, which are owned by shareholders and traded publicly on stock exchanges, are eligible for Mudra loans.
• Other Legal Forms: Any other legal entity recognized under Indian law, such as limited liability partnerships (LLPs), cooperatives, trusts, etc., may also be eligible.

Regarding the borrower’s qualifications and creditworthiness:

• Borrowers should not have a history of defaulting on loans from banks or financial institutions.
• They should have a satisfactory credit track record, indicating their ability to repay the loan.
• Individual borrowers may need to demonstrate the necessary skills, experience, or knowledge relevant to their proposed business activity.
• Educational qualifications, if required, are assessed based on the nature of the business and its specific requirements.

These eligibility criteria are designed to ensure that the borrowers have the capability to utilize the loan effectively for business purposes and to increase the likelihood of timely repayment.

Application Process

• Preparation: Gather all necessary documents required for the loan application, including identity proof, address proof, business plan, financial statements, and any other relevant documents as specified by the lending institution.
• Selection of Loan Category: Decide on the loan category based on your funding requirements. The PMMY offers three categories: Shishu (up to ₹50,000), Kishor (₹50,001 to ₹5,00,000), and Tarun (₹5,00,001 to ₹10,00,000).
• Choose Lending Institution: Identify a financial institution or bank that participates in the Mudra loan scheme. Most commercial banks, regional rural banks (RRBs), cooperative banks, and microfinance institutions (MFIs) offer Mudra loans.
• Application Submission: Visit the chosen financial institution’s branch or apply online through their website, if available. Fill out the Mudra loan application form with accurate details about yourself and your business proposal.
• Documentation: Submit all required documents along with the application form. These may include KYC documents, business plan, proof of business ownership, income tax returns, and any other documents specified by the lender.
• Loan Processing and Approval: The lending institution will review your application and documents to assess your eligibility and creditworthiness. This process may involve verification of the provided information and may take some time.
• Loan Disbursement: Upon approval, the loan amount will be disbursed to your bank account. Ensure that you maintain transparency and compliance with the terms and conditions of the loan agreement.
• Utilization of Funds: Use the loan amount judiciously for the intended business purpose, as outlined in your business plan. Proper utilization of funds is essential for the success of your venture and timely repayment of the loan.
• Repayment: Repay the loan as per the repayment schedule agreed upon with the lending institution. Timely repayment will help you maintain a good credit history and may make you eligible for future financial assistance.

It’s essential to stay informed about the latest guidelines and procedures related to Mudra loans, as they may be subject to updates or revisions by the government or lending institutions. Additionally, seek guidance from financial advisors or loan officers if you have any questions or concerns during the application process.

Documents Required

The documents required for applying for a Shishu, Kishor, or Tarun loan under the Pradhan Mantri Mudra Yojana (PMMY) may vary slightly depending on the specific requirements of the lending institution. However, generally, the following are the common documents required for each category:

For Shishu Loan (Up to ₹50,000):

• Identity Proof: Aadhaar Card, Voter ID, Passport, PAN Card, Driving License, etc.
• Address Proof: Aadhaar Card, Voter ID, Passport, Utility Bills (electricity bill, water bill, etc.), Rental Agreement, etc.
• Business Plan: A brief plan outlining your business idea, proposed activities, estimated expenses, and expected income.
• Proof of Business Ownership: Any document confirming ownership of the business, such as a business registration certificate, trade license, etc.
• Income Proof: Depending on the nature of the business, you may need to provide income proof such as sales receipts, invoices, bank statements, etc.

For Kishor (₹50,001 to ₹5,00,000) and Tarun (₹5,00,001 to ₹10,00,000) Loans:

• Identity Proof: Same as mentioned above.
• Address Proof: Same as mentioned above.
• Business Plan: Detailed business plan covering aspects like market analysis, sales projections, operational details, etc.
• Proof of Business Ownership: Same as mentioned above.
• Income Proof: Detailed income documents, including bank statements, audited financial statements, income tax returns, etc.
• Educational Qualifications: In some cases, proof of educational qualifications relevant to the business may be required.

Additionally, the lending institution may request any other specific documents based on their internal policies and the nature of your business. It’s essential to contact the bank or financial institution where you intend to apply for the Mudra loan to get a precise list of required documents and guidance on the application process.

Interest Rates:

1. The interest rates for Mudra loans may vary depending on factors such as the lending institution, loan category, borrower’s creditworthiness, and prevailing market conditions.
2. Generally, interest rates for Mudra loans are competitive and affordable, aimed at promoting accessibility to credit for microenterprises and small businesses.
3. Some lending institutions may offer preferential interest rates or concessions for certain categories of borrowers, such as women entrepreneurs or borrowers from marginalized communities.

Government Support:

1. The Government of India provides refinancing support to lending institutions under PMMY through the Micro Units Development and Refinance Agency (MUDRA).
2. This refinancing support helps mitigate the risk for lenders, encouraging them to extend credit to microenterprises and small businesses, especially those in underserved areas or belonging to economically weaker sections.
3. By providing refinancing facilities, the government aims to ensure the availability of adequate credit at reasonable rates for the target beneficiaries of PMMY.

Monitoring and Evaluation:

1. PMMY implementation and its impact are subject to periodic monitoring and evaluation by relevant government agencies, including MUDRA and other stakeholders.
2. Monitoring mechanisms track the disbursement of loans, utilization of funds, repayment behavior, and overall performance of lending institutions in meeting PMMY objectives.
3. Evaluation exercises assess the effectiveness, efficiency, and impact of PMMY in terms of promoting entrepreneurship, generating employment, empowering women, and fostering economic growth at the grassroots level.
4. Insights from monitoring and evaluation activities inform policy decisions, program improvements, and corrective measures to enhance the effectiveness of PMMY in achieving its intended outcomes.

Awareness and Outreach:

1. The Government of India conducts extensive awareness campaigns and outreach programs to educate potential borrowers about PMMY and its benefits.
2. These initiatives include workshops, seminars, training sessions, and interactive sessions conducted at various levels, including rural areas, urban centers, and educational institutions.
3. Information dissemination through mass media channels, including television, radio, newspapers, and digital platforms, helps reach a wider audience and create awareness about Mudra loans.
4. Collaboration with local governments, community organizations, NGOs, and financial institutions strengthens the outreach efforts and ensures effective communication of PMMY’s objectives, eligibility criteria, application procedures, and support available to aspiring entrepreneurs.

These additional details provide a comprehensive understanding of the government’s support mechanisms, monitoring mechanisms, and outreach efforts aimed at promoting the success and impact of the Pradhan Mantri Mudra Yojana.

F&Q

What is MUDRA?

MUDRA stands for Micro Units Development and Refinance Agency. It is a financial institution set up by the Government of India to provide funding to microenterprises and small businesses.

Why has MUDRA been set up?

MUDRA has been established to facilitate the growth of microenterprises and small businesses by providing them with access to finance, thereby promoting entrepreneurship, job creation, and economic development.

What are the roles and responsibilities of MUDRA?

MUDRA’s primary role is to extend financial assistance to microenterprises through various lending institutions such as banks, NBFCs, and MFIs.

It refinances loans given by these institutions to microenterprises.

MUDRA also promotes awareness about financial inclusion and provides support for capacity building among microentrepreneurs.

What are the offerings of MUDRA? How will MUDRA function?

MUDRA offers financial products such as loans and refinancing facilities to microenterprises.

It functions by collaborating with partner lending institutions to disburse loans to eligible borrowers.

Who are the target clients of MUDRA? What kind of borrowers are eligible for assistance from MUDRA?

The target clients of MUDRA are microenterprises and small businesses engaged in manufacturing, trading, and services sectors.

Eligible borrowers include individuals, proprietary concerns, partnership firms, private limited companies, public limited companies, and other legal entities.

Are Regional Rural Banks (RRBs) eligible for assistance from MUDRA?

Yes, Regional Rural Banks (RRBs) are eligible for assistance from MUDRA in disbursing loans to microenterprises.

What is the rate of interest charged by MUDRA?

The interest rates charged by MUDRA may vary depending on the lending institution and loan category.

I have a small business dealing in paper goods. Can MUDRA help me?

Yes, MUDRA can provide financial assistance to your small business dealing in paper goods, subject to eligibility criteria and documentation requirements.

I have graduated recently. I want to start my own business. Can MUDRA help me?

Yes, MUDRA can provide financial assistance to recent graduates looking to start their own businesses, provided they meet the eligibility criteria.

I have a diploma in food processing technology. I want to start my own unit. Please guide me.

MUDRA can assist you in starting your own food processing unit by providing financial support and guidance through its partner lending institutions.

I am an artisan specializing in Jari work. I want to start my own work instead of doing job work for others. Can MUDRA help me?

Yes, MUDRA can provide financial assistance to artisans like you who want to start their own businesses. You may apply for a Mudra loan through partner lending institutions.

I intend to work on a franchise model and open an ice cream parlor. Can MUDRA help me?

Yes, MUDRA can support your venture to open an ice cream parlor under the franchise model. You can apply for a Mudra loan to finance your business plan.

I want to expand my pottery business by adding more variety and designs. What help can I get from MUDRA?

MUDRA can provide financial assistance to expand your pottery business. You can apply for a Mudra loan to fund the expansion project, purchase equipment, and develop new designs.

What is the scope of PMMY and various types of loans available, and which are the agencies that will provide the loan?

PMMY aims to provide financial assistance to microenterprises and small businesses. It offers three types of loans: Shishu, Kishor, and Tarun. Loans are provided by partner lending institutions such as banks, NBFCs, and MFIs.

Who will monitor the implementation of PMMY?

The implementation of PMMY is monitored by various stakeholders, including MUDRA, the Ministry of Finance, and partner lending institutions. Periodic reviews and evaluations are conducted to assess the progress and impact of the scheme.

Is there any scheme in the Central/State govt which is applicable all over India, in which loan without guarantee is granted/the guarantor’s identity is checked?

Yes, PMMY is a scheme initiated by the Government of India that provides loans without the requirement of collateral or guarantors for microenterprises and small businesses.

Are carpentry and RO water plant installation eligible for the loan? If so, what is the maximum and minimum amount of the loan?

Yes, carpentry and RO water plant installation are eligible for Mudra loans. The loan amount varies depending on the business’s requirements and the borrower’s eligibility.

What is the eligibility of persons for availing Mudra loans?

Eligible persons include individuals, proprietary concerns, partnership firms, private limited companies, public limited companies, and other legal entities engaged in eligible business activities.

Is there any subsidy under PMMY? If so, details thereof?

PMMY primarily focuses on providing credit support to microenterprises and small businesses and does not offer direct subsidies. However, borrowers may benefit from affordable interest rates and other concessions provided by partner lending institutions.

Kindly provide a brief profile of MUDRA?

MUDRA (Micro Units Development and Refinance Agency Ltd.) is a financial institution set up by the Government of India to provide funding to microenterprises and small businesses. It offers financial products such as loans and refinancing facilities to eligible borrowers through partner lending institutions.

Can you provide information on the MUDRA card?

The MUDRA Card is a debit card issued to Mudra loan borrowers to facilitate easy access to funds disbursed under the scheme. It allows borrowers to withdraw funds and make payments for business-related expenses.

Would the people of the Kumhar community benefit from PMMY for carrying out potters’ work?

Yes, individuals from the Kumhar community engaged in pottery work can benefit from PMMY by applying for Mudra loans to support their business activities.

What are the documents that are required to be submitted for availing loans under MUDRA?

The documents required for availing loans under MUDRA include identity proof, address proof, business plan, proof of business ownership, income proof, and any other documents as specified by the lending institution.

What is the grievance mechanism available against bank officials in the event of non-sanction of a loan?

Borrowers can raise grievances against bank officials through the bank’s grievance redressal mechanism, which typically involves submitting a written complaint to the bank’s designated authority or grievance cell. If the grievance is not resolved satisfactorily, borrowers can escalate the matter to higher authorities within the bank or approach the banking ombudsman or other regulatory authorities.

Can you elaborate on the details of security to be deposited for MUDRA loans?

MUDRA loans are primarily collateral-free, meaning borrowers do not need to provide security or collateral to avail of the loan. However, depending on the loan amount and the lending institution’s policies, certain security or collateral may be required in some cases.

Is there any standard format of application to avail MUDRA loans?

While there may not be a universal standard format for loan applications under MUDRA, lending institutions typically provide application forms or online portals through which borrowers can apply for Mudra loans. These forms may vary slightly from one institution to another but generally require similar information and documentation.

Can you briefly explain the repayment terms, eligibility, and action plan for the assistance availed from MUDRA?

Repayment terms for MUDRA loans vary depending on factors such as the loan amount, tenure, and the borrower’s repayment capacity. Loans are typically repaid through equated monthly installments (EMIs) or as per the agreed-upon repayment schedule.

Eligibility criteria for MUDRA loans include factors such as the borrower’s creditworthiness, business viability, and adherence to the lending institution’s policies.

Borrowers are expected to adhere to the business plan presented during the loan application process and utilize the funds for the intended purpose. Regular monitoring and periodic reporting to the lending institution may be required to ensure compliance and successful repayment.

Is PMMY applicable to all banks all over India?

Yes, PMMY is applicable to all banks and financial institutions operating in India, including public sector banks, private sector banks, regional rural banks (RRBs), cooperative banks, and microfinance institutions (MFIs). These institutions are authorized to disburse Mudra loans to eligible borrowers.

When will PMMY start in the Gorakhpur zone, and when will the scheme start in SBI branches?

PMMY is a centrally sponsored scheme implemented across the country. Therefore, it should be available in the Gorakhpur zone and SBI branches, subject to the readiness and participation of respective lending institutions.

Is there any requirement for life insurance for the MUDRA scheme?

There is typically no requirement for life insurance as a prerequisite for availing MUDRA loans. However, borrowers may opt for insurance coverage to mitigate risks associated with loan repayment or unforeseen events affecting their business.

Is obtaining a PAN card a must to avail PMMY loans?

While having a PAN card may be beneficial for identity verification and tax-related purposes, it may not be mandatory for all borrowers to avail PMMY loans. However, lending institutions may require PAN card details as part of the documentation process.

What is the rate of interest on MUDRA loans?

The rate of interest on MUDRA loans may vary depending on factors such as the lending institution, loan category (Shishu, Kishor, Tarun), and prevailing market conditions. It is advisable to check with the specific lending institution for current interest rates.

If the lending institutions do not give PMMY loans, what can I do to get it?

If a lending institution denies a PMMY loan, you can explore alternative options such as approaching other banks or financial institutions participating in the PMMY scheme. Additionally, you can seek guidance from MUDRA or other regulatory authorities for assistance in addressing any issues encountered during the loan application process.

What would be the action which can be initiated against banks that insist on security/collateral under PMMY? Where should complaints against the bank be made when they demand security/collateral for loans under PMMY?

If a bank insists on security or collateral for loans under PMMY despite the scheme’s collateral-free nature, you can file a complaint with the banking ombudsman or escalate the matter to higher authorities within the bank. The Reserve Bank of India (RBI) also provides grievance redressal mechanisms for addressing complaints related to banking services.

Is handicapped persons also eligible for PMMY loans?

Yes, handicapped individuals are eligible to avail PMMY loans, provided they meet the scheme’s eligibility criteria and documentation requirements. MUDRA aims to promote financial inclusion and support entrepreneurship among diverse segments of society, including persons with disabilities.

Is it required to submit IT returns for the preceding two years to avail a loan of ₹10 lakh under PMMY?

While the requirement to submit income tax returns may vary depending on the lending institution’s policies and the loan amount, providing income tax returns for the preceding two years can strengthen your loan application and demonstrate your financial stability and repayment capacity.

Under PMMY-Shishu loans, what is the turnaround time for processing the loan proposal?

The turnaround time for processing PMMY-Shishu loan proposals may vary depending on factors such as the complexity of the application, documentation completeness, and the efficiency of the lending institution’s loan processing system. Typically, the process aims to be efficient to ensure timely disbursement of funds to eligible borrowers.

Who are the eligible applicants under PMMY?

Eligible applicants under PMMY include individuals, microenterprises, and small businesses engaged in eligible economic activities such as manufacturing, trading, and services. Both existing entrepreneurs and aspiring entrepreneurs are encouraged to apply for PMMY loans.

Are MUDRA loans available for the purchase of CNG tempo/taxi?

Yes, MUDRA loans can be utilized for various business purposes, including the purchase of commercial vehicles such as CNG tempos or taxis, subject to the lending institution’s policies and eligibility criteria.

I have a savings bank account with Corporation Bank, Unnao, U.P. Would loans under MUDRA be available based on the SB account?

Having a savings bank account with a particular bank may facilitate the loan application process, but loans under MUDRA are typically disburse based on the borrower’s eligibility, business plan, and documentation submitted to the lending institution. You can approach Corporation Bank or any other participating bank to inquire about MUDRA loan availability and eligibility criteria.

Is Khadi activity eligible under PMMY loans?

Yes, Khadi-related activities such as Khadi manufacturing, trading, or other Khadi-based enterprises are eligible for PMMY loans. MUDRA aims to support a wide range of microenterprises and small businesses, including those involved in promoting traditional and indigenous industries like Khadi.

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