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The Mudra loan is offered to many business owners with a strong business plan. However, to avail of the loan, one must fulfill the requirements set by the lending institution. Every institution will have its requirements and the rate of interest charged on the loan amount.
In this article, understand the working mechanism of the Mudra loan, eligibility, benefits, features, and process of the Mudra Loan in detail.
Pradhan Mantri Mudra Yojana (PMMY), also known as Mudra Loan, is a scheme started by the Government of India. The scheme was first introduced on April 8, 2015, by the Prime Minister of India. The Mudra loan scheme aims to provide financial assistance to those who run or plan to start their own micro, small, or medium enterprises. This initiated scheme offers a loan amount of up to ₹ ten lakhs. The scheme has categorized the loans into three, which are Shishu, Kishore, and Tarun.
Loan amount up to ₹ 50,000 can be availed under this Mudra Yojana scheme with a nominal interest rate ranging between 10% to 12%.
Loan amount up to ₹ 5,00,000 can be vailed under this category of the Yojana. It is an unsecured loan with a nominal interest rate ranging from 14% to 17%.
Loan amount up to ₹ 10,00,000 can be availed under this category. Being an unsecured loan, the nominal interest is charged from 16% and varies depending upon the lending institution.
Mudra Loan is one of the best Government Schemes for business entrepreneurs in India with the below-mentioned features:
The PM Mudra loan interest rate is not fixed and keeps changing. Not all banking institutions offer the same rate of interest. PM Mudra loan interest rate for various banks is mentioned in the table below:
|Banking Institutions and NBFCs||Applicable Interest Rate|
|HDFC Bank||10.00% p.a. to 22.50% p.a.|
|FlexiLoans||1% / month onward|
|ZipLoan||1% / month to 1.5% / month (Flat Return on customer’s Investment)|
|Axis Bank||14.25% p.a. to 18.50% p.a.|
|IDFC First Bank||14.50% p.a. onwards|
|Kotak Mahindra Bank||16% per annum – 19.99% per annum|
|Fullerton Finance||17% p.a. to 21% p.a.|
|Bajaj Finserv||17% p.a. onwards|
|RBL Bank||17.50% p.a. to 25% p.a.|
|ICICI Bank||18% p.a. onwards|
|Indifi Finance||1.5% / months onwards|
|Lendingkart Finance||1.5% / month to 2% / month|
|Tata Capital Finance||19% p.a. onwards|
|NeoGrowth Finance||19% p.a to 24% p.a.|
|Hero FinCorp||Up to 26% p.a|
A few benefits of the PM Mudra loan are as follows:
Pradhan Mantri Mudra Yojana loan can be availed by business entities who are working in the field of services, trading, and manufacturing. Below is the list of eligible entities for PM Mudra loan:
The PM Mudra loan scheme was launched to provide financial assistance to small and medium enterprises and help them grow by the Government of India. The major purpose of this scheme is to provide financial aid to the non-corporate-related small enterprise sector via the numerous Last Mile Financial institutions like NBFCs, banking institutions, and MFIs. Here are some of the purposes of a Mudra loan:
The steps to apply for Pradhan Mantri Mudra Yojana (PMMY) online are as follows:
Step 1: Visit the official portal of the PM Mudra Yojana authorized site.
Step 2: Download the relevant application form from the three types of Mudra schemes available under the PMMY Kit.
Step 3: Open the form and enter both personal and business details as asked, such as date of birth, name, business/residential address, qualifications, educational background, and more.
Step 4: Submit the PMMY application form. Ensure you have attached all the relevant documents while submitting it to the Last Mile Financial institutions like NBFCs, banking institutions, and MFIs.
Step 5: After submitting, the Last Mile Financial institutions like NBFCs, banking institutions, and MFIs will process it and verify it within 10 days. Once, the application is approved, the loan will be sanctioned in your account within a few days.
The steps to apply for PM Mudra Yojana offline are as follows:
Step 1: Visit any PMMY-authorised Last Mile Financial institutions like NBFCs, banking institutions, and MFIs. Ensure that you are carrying a well-written application form.
Step 2: Ask for the right PM Mudra Yojana form for Shisu, Kishore, or Tarun and fill it with accurate information.
Step 3: Submit the duly filled form along with required documents and passport-sized photographs to the institution.
Step 4: After submission, the application will be processed and verified within a stipulated time frame. Once, approved, the loan amount will be sanctioned to the bank account of the applicant within a few days.
The rate of interest for Mudra loans varies depending upon the financial institution. Below is the list of interest rates offered by prominent banks and financial institutions of India:
|Name of the Bank||Rate of Interest|
|State Bank of India (SBI)||Linked to MCLR|
|ICICI Bank||As per bank guidelines|
|IDBI Bank||Linked to Bank’s Base rate and Rating|
|UCO Bank||8.85% p.a. onwards|
|Bank of Baroda||9.65% p.a.|
|Indian Overseas Bank||As per bank guidelines|
|Union Bank of India||7.30% p.a. onwards|
|HDFC Bank||As per bank guidelines|
|Canara Bank||As per bank guidelines|
|Central Bank||As per bank guidelines|
|Allahabad Bank||As per bank guidelines|
|Bank of Maharashtra||9.25% p.a.|
|Bank of India||Linked to MCLR|
|Vijaya Bank||9.65% p.a. (Merged with Bank of Baroda)|
|Oriental Bank of Commerce||As per bank guidelines|
|Tamilnad Mercantile Bank||8.95% p.a. onwards|
The list of businesses that can avail of the benefits of PM Mudra Yojana are
There are more than 150 banks and financial institutions that have been selected to be partners in the Mudra Loan scheme. Some of them are listed below:
One of the government programs for women entrepreneurs to promote an entrepreneurial culture is the Pradhan Mantri Mudra Yojana (PMMY). Women with the desire to start and grow their businesses might choose the Mudra Yojana program, which various banks and financial organizations offer. The loan amount will be given to the women who qualify for this program as a kind of financial support to help them stand strong and create a better future for themselves.
When Mudra schemes for women are approved, banking institutions will issue Mudra cards that function similarly to credit cards to maintain the cash flow of their businesses. The maximum withdrawal allowed with the card is 10% of the loan balance. Depending on the characteristics and needs of the expanding business, the Mudra Yojana offers a variety of programs for women. According to the Indian government, the maximum amount of money that women entrepreneurs may receive is 10 lakhs.
Mudra Card is similar to a debit card that is used by Mudra loan borrowers for meeting their daily business needs. After the application has been approved, the lender will open a Mudra account for the borrower. Also, a debit card is issued with the account, known as Mudra Card. The loan account is sanctioned in the same account and the borrower can withdraw the same via the debit card in small portions as per the requirements of their business.
One can contact PM Mudra Yojana customer care or helpline services with their queries on the following contact numbers:
National Mudra Loan Toll-Free Numbers
The achievements of the Mudra Loan scheme are tremendous and have helped thousands of businesses to start and expand in the past year. The achievement of this scheme are as follows:
|Financial Year (2021-2022)||2021-2022|
|Number of PM Mudra Yojana Loans Sanctioned||53795526|
|Total Amount Sanctioned||₹ 339110.35 crores|
|Total Amount Disbursed||₹ 331402.20 crores|
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The authority usually takes 7 to 10 days to approve a Mudra Loan. Also, once the loan is approved, the amount will be disbursed in a day or two of the acknowledgement.
The interest rate of a Mudra Loan Yojana is quite competitive. It ranges from 11.5% to 20%, depending upon an individual's amount, repayment tenure, and personal history.
Many banks in India offer Mudra Loans, such as Bank of India, Standard Bank, Oriental Bank, Bank of Patiala and many more.
The CIBIL score does not impact the Mudra loan, as the government has launched it to provide financial assistance to start a new business or expand the existing ones.
Loan amounts of up to ₹ ten lakhs can be availed from banks under the Mudra Loan Yojana for starting a business venture or expanding the existing ones in the non-farming fields
Income tax returns are mandatory for Mudra loans if someone is eligible for them. The person is required to submit the last two years of ITR for a loan.
No, a PAN card is not a required document for and avail of a Mudra loan in India.
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