MUDRA Loans are made available under the Pradhan Mantri Mudra Yojana (PMMY). The abbreviation for Micro-Units Development and Refinance Agency (MUDRA) stands for Micro-Units Development and Refinance Agency. Borrowers can apply for business loans ranging from Rs.50,000 to Rs.10 lakh under this scheme, which is separated into three categories: Sishu, Kishor, and Tarun. MUDRA loans include interest rates starting at 7.30 percent per year and repayment durations ranging from one to seven years.
Mudra Loans were established by the Indian government as part of the Pradhan Mantri Mudra Yojana (PMMY) effort to assist small business owners in fulfilling their capital requirements and operating expenses through easy financing alternatives. A Mudra Loan is available to anybody who owns or runs a small business.
The following entities are eligible to apply for a Mudra Loan:-
- Applicants must be at least 18 years old, with a maximum age limit of 65.)
- Loans are available to non-farm income-generating businesses in commerce, manufacturing, and services
- The credit request must be less than ten lakh rupees. Since April 1, 2016, P entities have been required to engage in connected agricultural services.
On April 8, 2015, the Hon’ble Prime Minister Shri Narendra Modi launched the Pradhan Mantri Mudra Yojana (PMMY). For the past four years, PMMY has been in operation. The programme has sanctioned a total of Rs. 8.93 lakh crore over the last four years, benefiting 18.25 crore loan accounts.
During the first year, a target of 1.22 lakh crore was set under PMMY, against which banks and MFIs sanctioned 1.37 lakh crore. The goal set for the second year, FY 2016-17, was 1.80 lakh crore, which was met by banks, MFIs, SFBs, and NBFCs granting loans totalling more than 1.80 lakh crore. More than’2.53 lakh crore was sanctioned in FY 2017-18, the third year of operations, compared to a goal of 2.44 lakh crore. In FY 2018-19, 3.21 lakh crore was sanctioned against a target of 3 lakh crore. Throughout these four years,
MUDRA acted as a support institution, funding lending institutions and closely monitoring the programme using a dedicated site that captured aggregated data under PMMY.
According to the achievement figures, the total performance of the programme by all institutions rose by 27% over the previous year. While public sector banks grew at a 7% annual pace, private sector banks grew at a 29% annual rate. RRBs grew at a rate of 17% every year. State Bank of India topped the list of public sector banks,
A total of 33,825.92 crores has been sanctioned for 27.37 lakh accounts. SBI was followed by Canara Bank and Bank of India, each of which obtained a sanction of Rs. 10,297 crore and Rs. 6,430.74 crore, respectively. Private sector banks also fared well, with a total sanction of’ 64,037.25 crore, representing a 27 per cent increase over the previous year.
Bandhan Bank topped the list with a sanction of 20,913.48 crores, accounting for almost 33% of all Private Sector Banks’ total sanctioned. IndusInd Bank, with a penalty of 12,093.50 crores, and ICICI Bank, with a penalty of 6,579.41 crores, were the two largest contributors in the private sector banks category. Micro Finance Institutions’ performance grew by 27% during fiscal year 2018-19. MFIs sanctioned loans of 63,470.97 crores to 2.48 crore borrowers.
Bharat Financial Inclusion Limited was the biggest Microfinance Institution, with a sanction amount of ‘17,052.64 crores to more than 65 lakh loan accounts.