Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana is a scheme of Govt. of India to help those people who want some money for business, and they don’t have money. For that kind of people, Govt. has brought a scheme PMMY. That will give money to those people who really in need and want money for their business. This scheme will help them to full fill their needs. And it enables a small borrower to borrow from all Public Sector Banks such as Regional Rural Banks, and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non-Banking Finance Companies (NBFC) for loans up to Rs 10 lakhs for non-farm income-generating activities. The scheme was launched on 8th April 2015 by the Hon’ble Prime Minister.

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Eligibility for this Scheme:

Any Indian Citizen, who has a business plan for a non-farm sector income such as manufacturing, processing, trading or service sector and whose credit need is less than Rs 10 lakh so they can approach either a Bank, MFI, or NBFC for availing of Micro Units Development & Refinance Agency Ltd. (Mudra) loans under Pradhan Mantri Mudra Yojana (PMMY). Basically, all those who want to avail loans below INR 10 lakhs for micro-units are qualified for such loan. An application form under the scheme would be available with each of the above-mentioned institutions. Apart from the documents, applicants’ banks might ask for other documents as required. The Banks should not charge any processing fee and aren’t supposed to request any collateral. The loan repayment period is extended to 5 years. However, it is made clear that any applicant shouldn’t be a defaulter to any financial institution.

What is the main motto of the MUDRA Yojana?

The inception ofMudra Yojana was done keeping in mind several objectives will be fulfilled during the implementation of this yojana. The most prominent of these are:

1. For laying down policy guidelines for financing small/ micro enterprises
2. Getting all the Microfinance Institutions and related entities, registered and then regulating the same.
3. For helping the small businesses, develop and grow further.
4. Assisting lower-income groups in building and expanding their business
5. To assist in creating easy access to finance for unbanked and help in lowering their cost of finance
6. To provide SC/ST lending preference
7. For regulating all Microfinance Institutions that are dealing with trading, manufacturing, and service

What type of loan you can take from Mudra Yojana?

The loans under this scheme are:

1. Car loan
2. Commercial vehicle loan
3. Two-wheeler loan
4. Working capital loan
5. Loan for plant and machinery
6. Renovation of the business space.

How much loan can we take?

As per the choices for financing available under this scheme, the loan limits and interest rates vary for accommodating for the growth phase of the respective business availing such loan. The applicable limits and rates are as follows:

1. Shishu – Loans up to a limit of INR 50,000 with interest being 1 percent/month or 12 percent/annum. The repayment period for such loan is up to 5 years
2. Kishore – Loans from INR 50000 up to INR 5,00,00. The interest rate would depend on the bank, as per the guidelines of the schemes and keeping in view the applicant’s credit history. The loan repayment period is dependent on the option of the bank
3. Tarun – Loans from INR 5,00,000 up to INR 10,00,000. The interest rate would depend on the bank, as per the guidelines of the schemes and keeping in view the applicant’s credit history. The loan repayment period is dependent on the option of the bank

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Overall 27 Public Sector Banks, 31 Regional Rural Banks, 17 Private Sector Banks, 36 Microfinance Institutions, 25 Non-Banking Financial Institutions and 4 Co-operative banks are giving loans as of now. 60 percent of the loans under the scheme have offered under the ‘Shishu’ option and the remaining 40 percent would be under ‘Kishore’ and ‘Tarun’ schemes.

How to get Mudra loan under the PMMY scheme?

You have to follow some process of getting Mudra Loan under the PMMY scheme. You have to simply follow these steps:

• First, you have to fill Loan Application
• And then select your business plan.
• Proof of Identities like PAN / Drivers License / Aadhaar Card / Passport and more.
• Residence proof like recent telephone bill/electricity bill or property tax receipt and more.
• Applicant’s recent photograph less than 6 months old
• Quotation of machinery or other items will be purchased.
• Name of supplier or details of machinery or prices 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.

The PMMY launched on 8th April 2015, So they are providing loans to small business owners up to the amount of Rs.10 lakh.
Following are the individuals who need to know and how to apply for MUDRA loan under this scheme:

• Small manufacturing business owners.
• Fruit and vegetable sellers
• Artisans
• Shopkeeper

For more information click here: http://www.mudra.org.in/

It’s a financial initiative for facilitating micro-units and providing them with sufficient funds to help them develop their business. Medium and small businesses are, often incapable of availing loans from banking institutions because of a lack of security and inadequate funds for paying off the interest. So, there are more than 577 crore small businesses at present functioning in the country. So, Helping these businesses grow would ultimately lead to the advancement of the economy. It enables a small borrower to borrow from all the Public Sector Banks such as PSU Banks, Regional Rural Banks, and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non-Banking Finance Companies (NBFC) for loans up to Rs 10 lakhs for non-farm income-generating activities.

Targets under the PMMY Scheme:

The finance minister in the Budget 2016-2017 set a target of advancing INR 1.22 lakh crores under the MUDRA Yojana to help to support and to revive the MSME. This target has achieved. So, in light of the erstwhile success, the union government decided to double the lending target under the Mudra Yojana. And the Finance Minister said that though the target for lending is scale-up, the key targets would be women, backward classes, minorities, Dalits and Tribals who have not got the opportunity of getting finances for their businesses.

What is the benefit?

It’s a financial initiative for facilitating micro-units and providing them with sufficient funds to help them develop their business. Medium and small businesses are often incapable of availing loans from banking institutions because of a lack of security and inadequate funds for paying off the interest, So there are more than 577 crore small businesses at present functioning in the country. So, Helping these businesses grow would ultimately lead to the advancement of the economy. Micro Units Development and Refinance Agency Ltd. [MUDRA] is an NBFC supporting development of the micro-enterprise sector in the country. MUDRA provides refinance support to Bank for lending to micro units having loan requirements up to 10 lakh. MUDRA provides refinance to micro-business under the Scheme of Pradhan Mantri MUDRA Yojana. The other products are for development support to the sector.

FAQs:

1. Why Mudra Yojana has been launched?

Ans:- The biggest challenge to the growth of entrepreneurship in the Non–Corporate Small Business Sector is lack of financial support to this sector. That’s why more than 90% of this sector does not have any access to formal sources of finance. So Govt. is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSBS segment or the informal sector for bringing them in the mainstream. This time, people are facing unemployment So it is a big problem at this time.

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2. What is the interest rate of Mudra Yojana?

Ans:- The Mudra is a refinancing agency. It will extend its funds to Last Mile Financiers because it enables them to reach out to the sector. Access to finance in conjunction with rational price is going to be the unique customer value proposition of MUDRA. It will use a variety of innovative financing means including technology to bring down the cost of funding for the ultimate borrower.

3. What is the eligibility for Mudra Loan?

Ans:- Any Indian Citizen can apply. Who has a business plan, for a non-farm income-generating activity such as manufacturing, processing, trading or service sector whose credit need is up to 10 lakh so they can approach the Bank for availing of the Mudra Loans under PMMY. The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY.

4. What are the documents required for the PMMY scheme?

Ans:- The terms and conditions of the loan will be governed by the rules, of the lending institution and the broad guidelines of RBI. The guidance regarding the documents needed maybe, obtained from any of the lending institutions in your locality.

Conclusion:

Pradhan Mantri Mudra Yojana (PMMY) is a scheme of the Government of India to provide loans up to Rs. 10 lakh to non-corporate, non-farm small/micro-enterprises. Under PMMY, people involved in non-farm activities can avail loans up to Rs. 10 lakh. The loans are giving under the Mudra scheme by Private Sector Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), Public Sector Banks, Regional Rural Banks (RRBs), State and Urban Co-operative Banks and Foreign Banks. This helps small entrepreneurs save the interests that they need to pay. Beneficiaries of the loan do not have to visit the bank every time for withdrawal of the loan amount, as they can make withdrawals using the Mudra Debit Card.

Note:

• In the Mudra scheme, you don’t have to pay the processing fee.
• No collateral.
• The repayment of charges has extended up to 5 years.

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