Table of Contents
Introduction of PRADHAN MANTRI MUDRA YOJANA
Mudra Loan is given under Pradhan Mantri MUDRA Yojana (PMMY) that was launched by our Hon’ble Prime Minister on 8th April 2015 with the motto “Fund the unfunded” to Non-Corporate Small Business Sector engaged in non-farm income generating activities where the credit requirements do not exceed Rs.10.00 Lakhs (Rupees Ten Lakhs). It has been advised by Department of Financial services, Ministry of Finance that “Allied agriculture activities” e.g., poultry, dairy, fishery, beekeeping, pisciculture, food & agro-processing etc (excluding crop loans, land improvement such as irrigation, wells) and services supporting these activities, which provide livelihood or income generating have also been included under PMMY scheme w.e.f. 01.04.2016.
To address the above issue our PM launched specialized agency named as MICRO Units Development and Refinance Agency (MUDRA) Ltd, on 8th April 2015 and on the same day launched captioned scheme PMMY also.
It may be observed that this segment mainly consists of non-farm enterprises in manufacturing, trading and services, whose credit needs are below Rs.10.00 Lakhs
Eligible Loans under the scheme consists of All “Non-farm enterprises including allied agriculture activities” under “Micro and Small enterprises segment under MSME and engaged in “income generating activities” in “manufacturing, trading and services” and whose “credit needs are up to Rs.10.00 Lakhs”.
In easy language we can say that Petty shop keepers, self employed persons undertaking various services like fabricators, Tailors, all service providers etc., Road Transport operators ranging from cart pullers to taxi operators are eligible for this Mudra Loan.
One of the Key benefits of the Mudra Loan is that no collateral security required for this loan.
There are 3 types of Mudra loans depending on the quantum of loan amount-
- Shishu :- Covering Loan up to Rs.50000.00
- Kishore:- Covering Loans above Rs.50000.00 and up to Rs.500000.00
- Tarun:- Covering Loans aboveRs.500000.00 and up to Rs.1000000.00
These loans are given by Commercial Banks like SBI, BOB, BOI, PNB etc, RRBs, Small Finance Bank, NBFC. The borrower can approach any of the lending institutions mentioned above or can apply online through portal www.udyamimitra.in , www.jansamarth.in
The loans under MUDRA scheme can be availed only through banks and lending institutions which include:
- Public Sector Banks
- Private Sector Banks
- State operated cooperative banks
- Rural banks from regional sector
- Institutions offering micro finance
- Financial companies other than banks
Key benefits of loan under Pradhan Mantri Mudra Yojana
Eligibility
All non-corporate, non-farm enterprises under Micro and Small segment under MSME and engaged in income generating activities like manufacturing, trading and services. According to the PMMY scheme, the Mudra loan can be given to businesses in the non-farm sector as well as those engaged in allied agricultural activities like horticulture and fishing.
- Every non-farm business
- Under the section for small and micro businesses
- engaged in activities that generate income, including manufacturing, trading, and services
- whose credit requirements do not exceed Rs. 10 lakhs
- Since April 1, 2016, allied agricultural activities have also been covered under the PMMY program.
Maximum Loan Limit
Rs.10.00 Lakhs
Minimum Loan Limit
No limit
Type of Facilities
Either by way of Cash Credit/Overdraft/Demand Loan/Term Loan
Repayment Period
Maximum up to 84 months
Security
Hypothecation of assets created by the loan amount. No collateral security required
Processing Fee
Nil for all category
Pre-closure charges
Nil
Interest rate
Interest rates are charged as per the policy decision of the bank. However, the interest rate charged to ultimate borrowers shall be reasonable.
Insurance/Guarantee
Mudra loans are covered under CGTMSE coverage.
Margin
Change from bank to bank, generally up to 25%
CHECK LIST of required documents: (The check list is only indicative and not exhaustive and depending upon the local requirements at different places addition could be made as per necessity)
- Proof of identity – Self certified copy of Voter’s ID card / Driving License / PAN Card / Aadhar Card/Passport.
- Proof of Residence – Recent telephone bill, electricity bill, property tax receipt (not older than 2 months), Voter’s ID card, Aadhar Card & Passport of Proprietor/Partners/Directors.
- Proof of SC/ST/OBC/Minority.
- Proof of Identity/Address of the Business Enterprise -Copies of relevant licenses/registration certificates/other documents pertaining to the ownership, identity and address of business unit.
- Applicant should not be defaulter in any Bank/Financial institution.
- Statement of accounts (for the last six months), from the existing banker, if any.
- Last two years balance sheets of the units along with income tax/sales tax return etc. (Applicable for all cases from Rs.2 Lacs and above).
- Projected balance sheets for one year in case of working capital limits and for the period of the loan in case of term loan (Applicable for all cases from Rs.2 Lacs and above).
- Sales achieved during the current financial year up to the date of submission of application.
- Project report (for the proposed project) containing details of technical & economic viability.
- Memorandum and articles of association of the company/Partnership Deed of Partners etc.
- In absence of third party guarantee, Asset & Liability statement from the borrower including Directors& Partners may be sought to know the net-worth.
- Photos (two copies) of Proprietor/ Partners/ Directors.