The Indian Government launched the Pradhan Mantri Mudra Yojana (PMMY) to support small businesses in their growth and expansion. Micro, Small & Medium Enterprises (MSMEs) play a crucial role in creating jobs, which helps reduce unemployment in India. These sectors significantly contribute to the economy, but many small and medium businesses struggle to compete due to a lack of funds.
The PMMY aims to address this issue by offering financial assistance through various institutions like public and private banks, small banks, NBFCs, scheduled banks, rural banks, and registered co-operative societies. The scheme is divided into three categories: ‘Shishu’, ‘Kishore’, and ‘Tarun’, each representing different stages of business development and funding needs.
Who can apply for the scheme? Individuals and MSMEs, including small and micro manufacturing units, small-scale industries, artisans, vendors, traders, retailers, manufacturers, sole proprietorships, partnership firms, and limited liability partnerships (LLPs) in trading, manufacturing, and services sectors, are eligible to apply.
Eligibility Criteria for Pradhan Mantri Mudra Loan: Applicants must be Indian citizens, and the loan amount should not exceed Rs. 10 lakhs. Businesses involved in farming activities are not eligible, but small enterprises in both rural and urban areas can apply.
Documents Required:
For Vehicle Loan:
– Identity proof (Aadhaar Card, Driving License, Passport, Voter ID)
– Address proof (Passport, Aadhaar Card, Bank statements, phone or electricity bill)
– Completed Mudra Yojana application form
– Vehicle loan application form
– Income proof
– Bank statement for the last 6 months
– Passport size photographs
For Business Installment Loan:
– Completed Mudra Yojana application form
– Identity proof (Aadhaar, PAN Card, Voter ID, Driving License)
– Address proof (Aadhaar, Passport, electricity bill, telephone bill)
– Business Installment Loan application form
– Proof of business or residence ownership
– Proof of qualification, establishment, and business continuity
– Trade references
– 2 years of ITR and CA certified financials
– Bank statement for the last 6 months
– 2 passport size photographs
For Business Loan:
– Completed Mudra Yojana application form
– Identity proof (Aadhaar Card, Passport, Voter ID Card, Driving License)
– Residential proof (Aadhaar, Passport, Bank statements, electricity bill)
– Business Loan application form
– Proof of enterprise or residence ownership
– Proof of qualification, establishment, and business continuity
– Bank statement for the last 12 months
– Income tax return for the recent 2 years
Mudra Loan Interest Rate: The PMMY is designed to help socio-economically disadvantaged people improve their livelihoods and the rural economy. Interest rates are set according to PMMY and RBI guidelines. The Central Bank’s MCLR or fixed base rate applies to private banks for micro units, with lending rates up to 3.5% for Regional Rural Banks and Scheduled Cooperative Banks.
Interest rates depend on factors like the applicant’s credit history, profile, business loan requirements, and PMMY and RBI guidelines. The interest rates for different segments are:
– Shishu Loan: 1% to 12%
– Kishore Loan: 8% to 12%
– Tarun Loan: 11% to 20%
Mudra Loan Application Process:
1. Visit the official website of the bank or financial institution where you want to apply.
2. Fill out the Mudra loan application form with your personal and business details.
3. Submit the required documents, including identity proof, address proof, and business proof.
4. Specify the loan amount and tenure you prefer.
5. Once your application is reviewed and approved, you’ll receive a MUDRA card to access the loan amount as needed.
