A Guide to Government Loan Schemes for Womens in India

The Pradhan Mantri Mudra Yojana (PMMY), which Prime Minister Modi launched in April 2015 to promote entrepreneurship through micro-credit access, has reported that women entrepreneurs have received the majority of loans since the scheme's inception.

What is the Modi Scheme for Womens Loans?

The Micro Units Development and Refinance Agency (MUDRA) Loan Scheme under PMMY, or Pradhan Mantri Mudra Yojana, is a government initiative that provides loans to individuals and MSMEs through banks and NBFCs.

  • MUDRA Yojana is available in three loan schemes: Shishu, Kishor, and Tarun. Loans under the Mudra scheme are collateral/security-free loans made available by financial institutions with repayment terms ranging from 12 months to 5 years and flexible EMIs.

  • Individuals, MSMEs, enterprises, or businesses engaged in manufacturing, trading, or providing services are the only ones who can benefit from the Mudra loan for women.

Government Women Loan Schemes offered under Mudra Yojana

Women's business loans from the government of India are classified into three schemes, Shishu, Kishor, and Tarun, under the Pradhan Mantri Loan Yojana (PMMY).

Each loan scheme's loan amount is listed below:

  • SHISHU Loan: The Mudra Shishu Loan scheme provides loans of up to Rs. 50,000 (for start-ups and new businesses).

  • KISHOR Loan: Loans ranging from Rs. 50,001 to Rs. 5,00,000 are available under the Kishor Loan Scheme (for the purchase of raw materials, equipment/machinery, and business expansion for existing businesses).

  • TARUN Loan: The Tarun Loan Scheme provides loans ranging from Rs. 500,001 to Rs. 10,00,000 (for established businesses and enterprises).

Mudra Funding Documents Needed

  • Completed application with passport-sized photos

  • Applicant and co-applicants' KYC documents: Passport, voter identification card, Aadhar card, driving licence, PAN card, utility bills (water/electricity bills)

  • Proof of membership in a special category, such as SC, ST, OBC, Minority, and so on (if applicable)

  • Bank statement for the previous six months

  • Proof of business address and tenure, if applicable

  • Any other documents that the bank may require

How to Apply for the Mantri Loan Yojana?

Offline Pradhan Mantri Loan Yojana Application Form

Applicants interested in a woman loan yojana can obtain an application form for the Pradhan Mantri MUDRA yojana from any of the banks listed under the scheme.

The following are the steps for applying for the MUDRA loan yojana:

  • Step 1: Go to the nearest bank that is part of the Mudra loan scheme.

  • Step 2: Present your business plan or concept.

  • Step 3: Submit a completed MUDRA loan application form.

  • Step 4: Submit any additional documentation, such as identity and address proof, company address proof, balance sheets, caste certificate, IT returns, sales tax, and so on.

  • Step 5: Complete all other bank formalities.

  • Step 6: The submitted documents, as well as the MUDRA loan application, will be verified.

  • Step 7: If the borrower fulfils all of the requirements, the loan will be approved.

How to Apply for a Mudra Loan Online?

Borrowers interested in the Prime Minister's Loan Scheme for Ladies can simply visit the official websites of the 29 banks; business loan application forms are available online.

To apply for the Pradhan Mantri MUDRA Yojana, follow the steps below:

  • Step 1: Save the MUDRA loan application form to your computer.

  • Step 2: Simply fill out the application form with accurate and relevant information.

  • Step 3: Determine whether the bank is public or private.

  • Step 4: Complete the formalities.

  • Step 5: The loan will be sanctioned once the borrower has completed this process.

Mudra Loan Advantages

Mudra loans are primarily available to individuals, retailers, shopkeepers, traders, vendors, and MSMEs in the manufacturing, trading, and service sectors. The Mudra scheme is the only one that is covered by the Government of India's Credit Guarantee Schemes.

  • Borrowed money can also be used to make term loans, working capital loans, and overdrafts. 

  • Mudra loans are available to all non-farm enterprises, i.e. small or micro businesses that generate revenue.

  • People belonging to the SC/ST categories can also apply for Mudra loans with lower interest rates.

What is the Goal of a Startup Business Loan for Women in India Given By the Government?

  • Mudra Yojana under PMMY encourages women entrepreneurship, and banks and Microfinance Institutions (MFIs) provide credit facilities for women borrowers, such as lower or concessional interest rates on loans. However this scheme is not similar to  government personal loan for womens in india

  • Mudra currently offers a 25 basis point (BPS) discount on interest rates offered by NBFCs and MFIs to female entrepreneurs. The maximum loan amount available under the Mudra Yojana for female entrepreneurs is Rs. 10 lakh. Women's Mudra loan eligibility remains the same as it is for individuals and businesses.

  • Since the launch of the Mudra Women Loan Scheme, the government has become more interested in providing business loans to women. This is why, of the four mudra loan applicants, three are women. According to Finance Minister Nirmala Sitaraman, a mudra loan scheme has so far disbursed Rs.1.62 billion rupees.

  • To help small business owners, the Shishu mudra loan interest rate for ladies has been reduced by 2%. They anticipate that 3 million people will benefit from the interest rate deduction.

What Exactly is a MUDRA Card?

Mudra card is a type of debit card issued to Mudra loan borrowers to help them meet their working capital needs. Following the approval of a Mudra loan, the lender opens a Mudra loan account for the borrower and issues a debit card. Borrowers can withdraw funds from the total sanctioned amount in installments based on their business needs after the loan is disbursed in their bank account.

Conclusion

Higher women's participation is very encouraging because the government has been talking about providing access to finance to women entrepreneurs, and the Mudra scheme has been mentioned as one of the top programmes.

It is the first scheme we look at when it comes to financial awareness and financial literacy among female entrepreneurs, and the scheme has done an excellent job of making this information available to the public.

Women’s Mudra Loan Scheme - Related FAQs

In the case of Mudra Yojana under PMMY, banks typically approve loans in 7-10 working days.

No, banks or other financial institutions are not required to provide collateral or security under Mudra Finance.

For existing businesses and salaried individuals, the previous year's ITR must be presented in order to apply for business loans under the Mudra Yojana.

You can check the status of your mudra loan online by going to the respective bank's website and going to the e-mudra loan application status section.

Private and public sector banks, Small Finance Banks (SFBs), Micro Finance Institutions (MFIs), Non-Banking Financial Companies (NBFCs), Regional Rural Banks (RRBs), and Commercial banks in both the private and public sectors provide Pradhan Mantri Mudra Loans under the RBI's sole permission and direction.