What is Mudra Loan Scheme? And How to Apply for Mudra loan?
In India, Mudra loan comes under the scheme of Pradhan Mantri Mudra Yojana which was launched by the Prime Minister of India on 8 April 2015. The scheme provides small or microloans up to 10 lakhs to non-farm, non-corporate micro and small enterprises. These kinds of loans are considered Mudra loans.
Usually, the lenders are Commercial Banks, RRBs, Cooperative Banks, Small Finance Banks, NBFCs and MFIs and borrowers can approach any of the above-mentioned lending institutions for loans. Also, Banks like https://www.sbi.co.in/portal/web/sme/pm-mudra-yojanaSBI can help your to Apply for Mudra Loan.
They can also apply online for a loan from any of the institutions as India has advanced in terms of technologies. Coming to the uses of Mudra loans, there are various things that one can do by availing Mudra loans and start a new business or anything for a livelihood.
Who can avail Mudra Loan & Uses of Mudra Loan
Mudra loan has been a great help for everyone who is in need of the loan. The Government of India initiative has helped many small and micro enterprises to start their business and become independent.
Below are some of the uses of Mudra loan or for what purposes you can avail Mudra loan:
- Mudra loan can be used as a business loan for vendors, shopkeepers, traders, and for other service sector activities as well.
- It is also availed as equipment finance by micro and small enterprises.
- Transport vehicles can also be financed using Mudra loans.
- It is also availed for starting up food product business as a wholesaler or manufacturer.
- It has also helped many individuals and groups to start their own textile business that includes handloom, zari, embroidery work, etc.
- Another major sector where Mudra loan can be utilized is the allied agriculture such as dairy and poultry farming, pisciculture, livestock, beekeeping to name a few.
Purpose of Mudra Loan
It is well known that Mudra loan is a savior for those who want to start a small or micro business without a strong income proof or stable employment. It is a way through which employment generation and income generation. There are numerous purposes why Mudra loan has been introduced which are stated below:
- Its main objective is to create a system that ensures maximum benefits to micro-businesses with minimum risks.
- It is introduced to let people start up their own business and become self-employed.
- It also had a vision of saving the handicraft and handloom industry by offering them new employment opportunities.
- Mudra loan also helped in removing unemployment and reducing poverty from the country by offering loans to lower class and non-salaried individuals and cooperative groups, loans to establish their business.
- The main concern that Mudra loan has addressed is women empowerment. It enables women to become self-dependent by starting their business such as salon or beauty parlors, boutiques, tailoring shops, etc so as to become empowered.
- To evaluate and guide small and micro businesses towards growth and profit generation within the law and order and in a regulated manner.
Benefits of Mudra Loan
There are many benefits that Mudra loan offers such as:
- The loan indirectly works towards a better economy of the country by empowering small and local businesses.
- It helps in creating more employment.
- It empowers the backward class of society and enables them to grow big on their own.
- It believes that not only larger business and corporate comprises the economy but small and micro even local businesses also make the country’s economy.
- It promotes different businesses so that the country can have a rise in the economy and many people will be able to get employed.
Interest rates and other details of Mudra loan
As mudra loan is offered by various financial and banking institutions, it is clear that the interest rate is not the same as always. It ranges from 11% to 20% depending on the loan amount and the loan lending institution.
Women as the key part of Mudra Loan
As the government is always insisting on the empowerment of women, it is seen that Mudra loan is also designed keeping women in mind. Mudra loan offers loans to women so as to enable them to be independent and self-employed. Moreover, the interest rate for loans to women is also less which is a move taken by the government to encourage them for taking the loan.
Download Eligibility Criteria for availing MUDRA refinance/ loan.
How to apply online for Mudra Loan?
There are 3 categories of Mudra loan.
- The first one is Shishu where loan up to Rs 50,000 will be given.
- The second one is Kishor where loan amount ranges from Rs 50,000 to Rs 5 lakh for covering various expenses.
- The third and the last category is Tarun where loan amount ranges from Rs 5 lakh to 10 lakh.
One can easily apply for a mudra loan as there is no agent or middleman is involved. They can also apply online and there is a common application form for Kishor and Tarun.
However, a separate application form can be downloaded from the official website for Shishu.
- There are certain standing information mentioned in the official website and the application form which one needs to follow.
- They need to fill up the loan application form carefully and then upload the needed documents mentioned on the form or the website.
- They also need to upload their passport size photograph and signature digitally and complete the application.
- They can choose the lending institution and can apply for Mudra loan there.
- Once everything is done, your loan is applied and will be verified by the concerned department and they will get back to you.
It is very easy to apply for Mudra loan online without any middleman. You can do it yourself and can simply receive the balance in your bank account and start with your business.