Mudra Loan Under Pradhan Mantri Mudra Yojana
Reviewed by: Fibe Research Team
- Updated on: 6 Dec 2024
- Published on: 29 Aug 2024
Reviewed by: Fibe Research Team
The Union Government extends collateral-free Prime Minister Mudra Loans to help finance micro, small or medium enterprises. This financial aid can help you start, enhance or expand your business based on your goals.
To know more about the Mudra loan scheme, including what it entails, its eligibility and the documents required, read on.
A Mudra loan funds startups and growing businesses under the Pradhan Mantri Mudra Yojana for the non-corporate sector. Here, ‘Mudra’ is an acronym for Micro Units Development and Refinance Agency Ltd. The Mudra loan scheme works to empower small businesses with financial aid for growth.
Per the PMMY loan (Pradhan Mantri Mudra Yojana) provisions, MUDRA has created various categories of loans, such as:
These categories are based on the entrepreneur’s or micro unit’s growth stage and financial needs. The government’s priority is to offer Shishu loans to encourage small-scale proprietors in India’s rural and urban areas.
There are many providers of Prime Minister Mudra loans. You can avail of this loan through qualified member lending institutions, such as:
Meeting some general eligibility criteria helps you qualify for this loan. These are:
You may be required to demonstrate skills, experience or knowledge relevant to the proposed activity.
Other Criteria
Once you know the eligibility for a Mudra loan, you will have to work on gathering documents. The documents you need for a PMMY loan depend on the type of loan you select. Check the tables below:
| Document Type | Details |
|---|---|
| ID Proof Self-attested | Choose one: 1. Aadhaar Card 2. Voter’s ID Card 3. PAN Card, Passport 4. Driving Licence 5. Government Photo ID |
| Address ProofSelf-attested | Choose one: 1. Telephone or Electricity Bill 2. Latest Property tax receipt (Less than 2 months old) 3. Passbook or bank account statements (attested by bank officials) 4. Aadhaar Card 5. Passport 6. Voter’s ID Card 7. Domicile Certificate 8. Certificate issued by a Government Authority/Local Panchayat/Municipality |
| Applicant’s Photograph | 2 copies of recent colour photographs, not older than 6 months |
| Quotation of Machinery/Items | Quotation for machinery/items to be purchased, including the following details: Supplier name details and price |
| Proof of Business Identity/Address | A copy of the following as per relevance: • Relevant Business Licences • Registration Certificates • Other documents related to business ownership and address |
| Document Type | Details |
|---|---|
| Identity Proofself-attested | Choose one: 1. Passport 2. Aadhaar Card 3. Driving License 4. PAN Card 5. Voter’s ID card |
| Address Proofself-attested | 1. Recent telephone and Electricity bill 2. Property tax receipt – not older than 2 months 3. Voter’s ID card 4. Aadhaar Card 5. Passport of Proprietor/Partners/Directors |
| Photograph of Applicant | 2 copies of recent colour photographs – not older than 6 months |
| Proof of Business Identity/Address | 1. Licenses 2. Registration certificates 3. Other documents related to business ownership and address |
| Bank/Financial Institution Default Status | Applicant should not be a defaulter in any bank or financial institution |
| Statement of Accounts | Last 6 months’ statement of business account from your existing bank, if any |
| Financial Statements | The last two years’ balance sheets income tax/sales tax returns – for cases from ₹2 lakhs and above |
| Projected Financials | Projected balance sheets for one year (working capital) or for the loan period (term loan) – for cases from ₹2 lakhs and above |
| Sales Achievement | Sales achieved during the current financial year up to the date of application submission |
| Project Report | Report on the proposed project, including technical and economic viability |
| Company Documents | 1. Memorandum and Articles of Association of the company 2. Partnership Deed of Partners |
| Asset & Liability Statement | Statement from the borrower, including Directors & Partners, if no third-party guarantee is provided |
Now you need to understand how to apply for a Mudra Loan. You can get Prime Minister Mudra loans through two means. These are:
You can apply for this loan offline by following these steps:
You can get an e-Mudra loan by following these steps:
At every stage of business, you require funds for your operations, expansions and diversification. If you need to supplement business financing or do not qualify for a Mudra loan scheme, you can get the needed funds from Fibe.
The Fibe Instant Personal Loan offers up to ₹5 lakhs and helps you get competitive interest rates by submitting minimal paperwork. This is an entirely digital process with instant approval. This enables you to cater to urgent monetary requirements with ease.
Zero preclosure charges and a 36-month repayment timeline help you borrow and repay the loan comfortably. Register on our website or download our Personal Loan App to acquire the funds you need to start or grow your business.
Interest rates for these loans are deregulated. Each associated lending institution charges its own interest rates in adherence to RBI guidelines. Usually, the rates on these loans are nominal.
The Tarun Mudra loan under the PMMY offers up to ₹10 lakhs for small businesses. You can apply for it from various financial institutions.
A Mudra loan offers many benefits. Some of these are:
Numerous public sector banks, state-operated co-operative banks, private sector banks, rural banks from the regional sector and small finance banks provide a Mudra scheme loan. Compare each bank’s fees, interest rates and requirements and choose the one that best matches your needs.
For amounts up to ₹50,000, there is usually no processing fee applicable on a Mudra loan. For amounts that are more than that, lenders may charge a processing fee along with GST.
