What is Mudra Loan?

The government of India has introduced the Mudra Loan Scheme under the Pradhan Mantri Mudra Yojana (PMMY). This scheme was started in 2015 by the Minister of Trade and Industry. This unique scheme was created to provide financial support to budding local or indigenous businesses owned and handled by citizens of India. The scheme seeks to provide financial assistance through interest-free or extremely low-interest loans to help these small businesses and startups develop and increase their production and distribution capabilities.

Apply for Mudra Loan Online

To apply for a MUDRA loan online, you can approach any Commercial Bank, Regional Rural Banks (RRBs), Small Finance Banks (SFMs), Micro Finance Institutions (MFIs), or Non-Banking Financial Companies (NBFCs).

Note: Applicants can also apply directly on the Udyami Mitra website i.e. https://udyamimitra.in/page/mudra-loans

  • The mudra loan online application process is easy and hassle-free.
  • Any loan amount between Rs. 50,000 to Rs. 10,00,000 can be availed

These loans are divided into three categories and have specific ceiling limits for loan amounts. Interested entrepreneurs will be able to apply for specific categories depending on the status of their business.

What are the Types of Mudra Loan And How To Apply for a Mudra Loan?

Under the Pradhan Mantri Mudra Yojana scheme, there are three categories of Mudra loans. Each category represents a specific loan amount range within which the applicant will receive his/her disbursement.

  • These amount categories vary from ₹50,000 to ₹5,00,000 and up to ₹10,00,000
  • These three categories are Shishu, Kishore, and Tarun Mudra Loans
  • All these loans can be availed via online applications through the Mudra website
  • Loans are sanctioned depending on business size and consecutive developments after the sanction of the first loan

Here is a detailed account of the following categories and how you can apply for e-mudra loan:-

  1. Shishu Mudra Loan
  2. Kishore Mudra Loan
  3. Tarun Mudra Loan

Shishu Mudra Loan

This category specifically caters to small businesses like startups and new local businesses that require a smaller capital to set up.

  • Under this category, applicants are eligible to receive an amount ranging up to ₹50,000
  • You can start the Shishu Mudra Loan online application process by visiting the Mudra website and filling up the form that is designated for this category
  • Almost anyone can apply under this category if they are Indian citizens and have ownership of the company

Banks have been given special instructions to concentrate on this category to make sure all new businesses get a chance to become successful.

Kishore Mudra Loan

The Kishore Mudra Loan category is provided to budding businesses that are in the development process. This loan is provided after the said business has received an initial round of Mudra loan.

  • These businesses require much more capital than ₹50,000, which is the ceiling limit for Shishu Mudra Loan
  • The Kishore Mudra Loan has a disbursement range of ₹50,000 to ₹5,00,000, depending on the business requirements
  • Under this category, Mudra Loan online application can be made through the portal by submitting the joint Kishore and Tarun application form with the necessary details
  • The loan will only be sanctioned after all the credentials have been verified

Tarun Mudra Loan

Tarun Mudra Loans are for businesses that have grown and developed even further and need more investment capital for expanding and upkeeping the business.

  • This particular category has the highest loan ceiling amount of ₹10,00,000
  • The Tarun mudra ‘loan online apply’ process for this one is the same as that of Kishore Mudra loan

You have to go to the Mudra web portal and fill up the joint Kishore and Tarun loan form listing your credentials which will determine if you are eligible for this loan.

Who can Apply for a Mudra Loan?

Mudra Loans can be taken by interested individuals who seek to start and develop their own business. The PM Mudra Loan is applicable for a business which is involved in:-

  • Manufacturing
  • Trade
  • Allied Agriculture
  • Any non-corporate startup

This Mudra Loan scheme can be availed by Indian citizens that own the said company. Large corporations cannot avail these loans on behalf of any other company. Additionally - ,

  • Any citizen of India, with valid citizenship proof and over the age of 18 will be able to join the Pradhan Mantri Mudra Loan online application process
  • Two or more individuals and organizations with Indian citizens only can apply for Mudra loans
  • People and organizations whose credentials and identity can be verified at a bank will be eligible to receive the sanctions for Mudra loans

Important Documents Required For E Mudra Online Application

You need to have a valid identity and address proof and other essential documents to qualify for the loan. Here are some documents that you will need to join the Pradhan Mantri Mudra Loan online apply process:

  • Identity Proof- Aadhar Card/Driver's License/Voter Card/Pan Card/, etc
  • Citizenship Proof- Birth Certificate/Voter Card
  • SC/ST/OBC Certificate if applicable
  • Income Proof
  • Bank Statements
  • Passport-sized recent pictures

Vision And Impact of Mudra Loan

The vision of the Pradhan Mantri Mudra Yojana is to create a sustainable culture of entrepreneurship that would boost the Indian non-corporate industry and lead budding startups along the road to success.

The government has recognized the need to set up a separate financial support system for these new businesses to have the necessary capital required for their growth and development.

The Mudra Loan Scheme has seen many success stories in the 6 years since the introduction of PMMY. Initially, the scheme was able to sanction 34880924 loans in the first year itself. This was an excellent achievement for the government, and a total amount of ₹132954.73 crores was disbursed to the applicants.

The Pradhan Mantri Mudra Loan Online Apply process had helped hundreds of people by the year 2021 when the government recorded a total sanction amount of ₹26893.82 crores approximately in the year 2020-2021.

Mudra Loans are incredibly beneficial for budding entrepreneurs who lack the capital to develop and expand their startups and new businesses. In 2016, the government recorded that around 90% of the loans were disbursed to small businesses under the Shishu Mudra Loan category. This showed that this scheme immensely helped new companies. Here are some more benefits of the PMMY scheme:-

  • Supply of Capital

    The scheme will provide small and local businesses with investment money that they can use to expand and develop their business.

  • Providing Employment

    As these loans allow expansion of local industries and businesses, it also helps employ more working hands.

  • Easy Loan Application

    You can obtain a business loan under the Mudra scheme very easily. E-mudra Loan Online Application is fast and straightforward.

  • Easy Debit System

    You will receive a RuPay Mudra Debit Card from which you will be able to withdraw money easily from ATMs.

  • Easy Payback

    You will be allowed to pack back the debt whenever you have cash ready to spare. You can also establish annual payment schemes.

  • Good for Women-Owned Businesses

    The Mudra Loan schemes have also helped establish many women who have dreamed of opening their own business to make an income for themselves. In 2016, around 75% of the loans sanctioned were actually to women-owned firms.

Conclusion

The Pradhan Mantri Mudra Yojana is a grand scheme that will bring a ton of benefits for people who want to start new businesses but do not have the capital needed to invest in them. Financial assistance from government sources can go a long way in helping such businesses, as we can see from the data that has been provided. The interest rates on loans are kept to a minimum to encourage people to start their own businesses and make a living for themselves while contributing to the local industry and trade development.