MUDRA Loan Scheme: The Pradhan Mantri MUDRA Yojana (PMMY) is a scheme introduced by the Hon’ble Prime Minister on April 8, 2015, that provides loans of up to ten lakh rupees to non-corporate, non-farm small/micro-companies. Commercial banks, RRBs, Small Finance Banks, MFIs, and NBFCs make these loans.
Features of the Pradhan Mantri Mudra Loan:
| Amount of the loan | The maximum amount of money you may borrow is Rs. 10 lakh. |
| Fee for processing | Loan of up to Rs. 50,000 under Shishu, from Rs. 50,001 to Rs. 5 lakh under Kishore, and from Rs. 5,00,001 to Rs. 10 lakh under Tarun Nil for Shishu and Kishore loans, and 0.5 percent of the loan amount for Tarun loans. |
| Existing and new units | Nil for Shishu and Kishore loans, and 0.5 per cent of the loan amount for Tarun loans. |
| Eligibility Period of repayment | 3 to 5 years old |
Details of the Product
MUDRA loans are supplied by MUDRA-approved banks, NBFCs, MFIs, and other eligible financial intermediaries. On April 8, 2015, the Prime Minister launched the Pradhan Mantri MUDRA Yojana (PMMY), with the purpose of providing MUDRA loans of up to ’10 lakh to income-generating micro-companies in the manufacturing, commerce, and service sectors.
- Loans up to ` 50,000/- (Shishu).
- Loans from ` 50,001 to ` 5 lakh (Kishore).
- Loans from ` 5,00,001/- to ` 10 lakh (Tarun).
The purpose of Pradhan Mantri Mudra Loan Yojana
Loans under the MUDRA can be utilised for a variety of reasons, including employee development and income growth. The most popular reasons for taking out Mudra loans are as follows:
- Financing for small company units’ equipment Shopkeepers, dealers, vendors, and other service-oriented firms can apply for business loans.
- Working capital loans can be obtained using MUDRA cards.
- Loans for automobiles used for transportation.
- Mudra Loans are accessible to persons who operate in agri-allied non-farm income-generating industries like poultry farming, beekeeping, pisciculture, and other similar activities.
- Anyone who uses tractors, tillers, or two-wheelers for commercial purposes is eligible for a Mudra Loan.
- Creating and putting into action a credit guarantee scheme to give loan guarantees to micro-enterprises.
- MUDRA Bank would also regulate and refinance all microfinance institutions (MFIs) that lend to micro and small companies in manufacturing, commerce, and services.
- When it comes to funding, SC/ST enterprises are given precedence.
Loan Limits and Interest Rates Mudra scheme
The loan limits and interest rates vary based on the financing choices available under this plan to meet the business receiving the loan’s development phase. The relevant rates and restrictions are as follows:
- Shishu -Loans of up to 50,000 rupees are available. The bank will establish the interest rate depending on the scheme’s specifications and the applicant’s credit history. The duration of the loan repayment period is chosen at the discretion of the bank.
- Kishore –Loans in the range of Rs.50,000 to Rs.5,000,000 are available. The bank will establish the interest rate depending on the scheme’s specifications and the applicant’s credit history. The bank determines the duration of the loan repayment period.
- Tarun – Loans ranging from Rs. 5,000 to Rs. 10,000 are available. The bank will establish the interest rate depending on the scheme’s specifications and the applicant’s credit history. The bank determines the duration of the loan repayment period.
- The loan will be disbursed by 27 public sector banks, 31 regional rural banks, 17 private sector banks, 36 microfinance institutions, 25 non-banking financial institutions, and four cooperative banks as of today. The ‘Shishu’ option will supply 60% of the loans under the programme, while the remaining 40% will be given by the ‘Kishore’ and ‘Tarun’ schemes.
