Micro Units Development & Refinance Agency (MUDRA) Limited is a body set up by the government of India for micro unit growth and refinancing activities.
The Hon’ble Finance Minister declared MUDRA in the 2016 Budget. Under MUDRA, funds are issued in 3 schemes named ‘Shishu,’ ‘Kishor’ and ‘Tarun’ to mean the phase of the beneficiary micro-units progress and financing needs. Micro Units and Entrepreneurs in India can obtain this loan.
The prime objective of the fund is to support the Indian MSME, which have been the Indian industry’s backbone. The program’s real name is Pradhan Mantri MUDRA Yojana (PMMY).
Mudra loan is provided for a range of functions that produce income and create jobs in Manufacturing, Education , Retail, and Agri.
What is Mudra loan’s objective?
One of the major limitations for SMEs is the absence of support from the formal banking or financial sector.
The lack of structured funding in many cases hinders the development of small companies and renders them inefficient when competing with bigger players.
MUDRA Bank was set up as a branch of SIDBI to eliminate this barrier and to provide loans to micro units or entrepreneurs.
MUDRA will be liable for refinancing of all corporate or financial institutions involved in the funding of Small Businesses, Societies, Trusts Section 8 Companies, Co-operative Societies, etc
MUDRA Loan Schemes
- Shishu: Loan of upto Rs.50,000/
- Kishor: Loans of above Rs.50,000 – Rs.5 lakhs.
- Tarun: Loans of above Rs.5 lakhs – Rs.10 lakh
Who is eligible for a MUDRA loan
Mudra loan is applicable to any Indian citizen who has an idea for a business in manufacturing, processing, trading, or in the service sector with an aim to generate revenue and needs a loan of 10 lakh to avail this benefit.
That individual can approach any bank, NBFC etc to get loan under this scheme.
To receive loans under MUDRA, the lender’s terms and conditions will have to be accepted. The loan rates are set as per RBI guidelines.
Since MUDRA is a refinancing entity, MUDRA does not provide loans directly but rather through established financial institutions , banks, etc.
To receive loans under MUDRA, the lender’s terms and conditions will have to be accepted. The loan rates are set as per RBI guidelines.
Since MUDRA is a refinancing entity, MUDRA does not provide loans directly but rather through established financial institutions , banks, etc.
Documents Required
- MUDRA Loan Application
- Project Report for MUDRA loan
- Identity Proof like PAN /License / Aadhaar Card and more.
- Residence proof – telephone bill / electricity bill and more.
- Recent photograph of applicant – must be less than 6 months old
- Quotation of machinery or items to be purchased
- Name of supplier or details of machinery
- Proof of identity / address of the business like tax registration, business license and more.
- Proof of category like SC/ST/OBC/Minority, if applicable
