Mudra Loan Benefits and its Eligibility Criteria
Thanks to the Government of India for introducing a loan scheme that helps small scale entrepreneurs to set up and meet the expenses. A MUDRA loan, also known as the Pradhan Mantri MUDRA Yojana, is a flagship launched by the honorable PM – Narendra Modi. The main aim of this MUDRA loan is to provide funds for non-farming and non-corporate micro and small enterprises. The loan works under 3 different types, in which the amount provided differs accordingly.
Features of PM MUDRA loan:
- The maximum amount of loan that you can avail from this scheme is ₹10 lakhs, which is categorized into 3. ₹50,000 under the Shishu plan, ₹50,000 to ₹500,000 under Kishore and ₹500,000 to ₹10, 00,000 under Tarun.
- There is a zero processing charge for the MUDRA loan scheme.
- The processing time of the Pradhan Mantri Mudra loan is 24 hours. The repayment period of the PMMY scheme is 3-5 years.
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What are the benefits of the MUDRA loan scheme?
- The targeted customers of MUDRA bank loans are the small-scale and micro-enterprises who are looking for funding requirements.
- The best thing about the PMMY loan is that you don’t have to provide any collateral security.
- Within 24 hours, the loan gets processed. Also, there are no additional charges for processing the MUDRA loan scheme.
- The loan is categorized into three types – each depending on the requirement and funding slab.
- You can avail of the loan in the form of overdraft, letter of credit, loan, or bank guarantee, whichever suits your requirement.
- The loan does not prescribe any minimum amount.
What are the eligibility criteria for MUDRA bank loan?
Any Indian citizen who is planning to set up their new business or expand their business can be eligible for getting a MUDRA bank loan. Companies and entities that fall under the following category can apply for the MUDRA loan scheme.
- All non-corporate non-farming entities
- , trading or service company
- Where the company requirement of credit is at a maximum of ₹10, 00,000, or lower.
Who else can avail PMMY loan?
- Vegetable and fruit dealers
- Small scale entrepreneurs who are dealing with the manufacturing of goods and services.
- Shopkeepers
- Artisans
- Small scale shopkeepers
- Individuals engaged in agriculture.
Documents required for applying MUDRA bank loan scheme
These are the following list of documents that are required for applying for the MUDRA bank loan. Not each of these documents is necessary. It depends on the kind of loan you are applying. For instance, a vehicle loan requires less documentation than a business installment loan.
- Filled up MUDRA application form
- Loan application form
- Income proof
- Photo identity proof
- Address proof
- Bank statement for the last 6 months
- 2 recent passport size photographs
- 2 years income tax returns
- A CA certified financials
- BIL application form
- Establishment proof
- Ownership proof of residence or office
- Trade references
- Proof of business continuity
- Bank statement of the last 12 months (in case of business loans group and rural business credit)
- Business vintage proof
Final verdict:
Government initiations like the Pradhan Mantri MUDRA Yojana scheme are one of the most popular and public-friendly projects. To start up a business in India and generate income for the country is what makes our economy strong and sustainable.
Keywords used: MUDRA loan, MUDRA bank loan, MUDRA loan scheme, Pradhan Mantri MUDRA loan