Small and medium enterprises are no longer subject to a capital shortage. With the introduction of the Pradhan Mantri Mudra Yojana on 8th April 2015, all eligible Indians can apply for this loan. Mudra stands for Micro Units Development and Refinance Agency. It is a much-needed financial help for non-corporate and non-farming enterprises. Individuals can avail a loan of up to Rs 10 Lakhs. To apply for Mudra loans online, you can choose any of the various authorised institutions by the government. There are broadly three types of products offered under the Mudra loan scheme and depending on one’s need and eligibility, any of these can be availed. These are:
- Shishu
Those who have just started or planning to start a business can avail of Shishu. It offers loans up to ₹50,000. - Kishor
This product is available for established businesses who are looking forward to expanding and enlarging their reach. A loan of up to ₹5 lakh can be available. - Tarun
All those fully established businesses who are in a need of capital to further strengthen their business can avail Tarun loan. It offers a loan amount up to ₹10 lakh.
Steps to apply for a Mudra loan online
To make things easier for everyone, the government has an online portal so that people can apply for a Mudra loan without having to go anywhere physically. The steps involved are:
- Step 1
Choose one of the authorised institutions of PMMY that is offering the loan - Step 2
Visit their official website and click on the apply online for Mudra loan option - Step 3
Check your eligibility and choose one of the forms available and download it - Step 4
Fill in the details as asked. Do not forget to re-check it - Step 5
Submit the form on the website along with the required documents.
Once the application form is approved, the loan will be granted to the provided bank account.
Steps to apply for a Mudra loan offline
Those who wish to apply for a Mudra loan through the conventional offline process can also easily apply for it. Follow the steps given below:
- Step 1
Choose one of the authorised institutions of PMMY that are offering the loan - Step 2
Visit the nearest branch of your chosen bank or NBFC - Step 3
Ask for a Mudra loan form and fill it correctly - Step 4
Attach all the relevant documents including passport-size photographs wherever needed - Step 5
Submit the form along with the documents
The institution will review and approve the form if you are eligible for it. Soon, the loan will be disbursed to your bank account.
Required documents for Mudra loan:
Certain documents have to be presented when you are applying for a Mudra loan. If you are going with the offline process of the application form, do not forget to carry these documents with you to avoid any unnecessary to and fro. The list of documents for Mudra loan are as follows:
- Mudra loan application form
- Recent passport size photographs
- KYC documents
- Caste certificate (if applicable)
- Business income proof
- Business establishment proof (if established)
- Last one-year bank statement
- Address proof
- Income Tax Returns of past 2 years (if any)
- The institution may ask for any further documents if required.
Eligibility criteria for Mudra loan
Before you reach the application process for a Mudra loan, do not forget to check the eligibility criteria for the same. These include:
- Any individual, partnership firm, proprietary concern, private limited company or any other entity who requires a loan up to 10 lakh can apply
- The applicant must be an Indian with a business plan or established business
The purpose of the loan must be setting a new business or expanding an existing business - Micro businesses dealing in the industries of manufacturing, trading, processing, and service sector are eligible
Interest rate offered by Mudra loan
Check out the interest rates of Mudra loan for various products offered:
| Product Name | Interest Rate |
| Shishu | 1% to 12% per annum |
| Kishor | 8.60% to 11.15% per annum |
| Tarun | 11.15% to 20% per annum |
Conclusion
Mudra loan has come as a huge help for all the medium and small businesses. From Rs 50,000 to Rs 10 Lakhs, an eligible business person can avail loan and build their business. All you need to ensure is your eligibility and choose the right product under the Mudra loan. Select your preferred lending institution and fill out the form to avail the loan.
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