Mudra Yojana for MSMEs: Apply for Loans Up to Rs 10 Lakh Online, Know the Eligibility, Interest Rates, MUDRA Card, Lending Institutions, and More

The Pradhan Mantri MUDRA Yojana (PMMY) was launched by Prime Minister Narendra Modi on April 8, 2015. Its primary goal is to provide easy, collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs. This initiative aims to boost income-generating activities across various sectors and is a significant tool for promoting financial inclusion in India.

The PMMY primarily targets the Non-Corporate Small Business Segment (NCSB), which includes a vast range of small proprietorship and partnership firms. These firms operate as small manufacturing units, service providers, retailers, vegetable vendors, truck operators, artisans, and more, spread across both rural and urban areas. The scheme benefits micro-entrepreneurs involved in manufacturing, processing, trading, or service sectors, as well as activities allied to agriculture, such as poultry, dairy, and beekeeping.

MUDRA Products: Shishu, Kishore, and Tarun

Under the PMMY, MUDRA offers three key products: Shishu, Kishore, and Tarun. These are designed to support micro-entrepreneurs at different stages of their business development.

• Shishu: Loans up to Rs 50,000, ideal for businesses in their early stages.

• Kishore: Loans ranging from Rs 50,001 to Rs5 lakh for businesses looking to grow.

• Tarun: Loans between Rs 5 lakh and Rs10 lakh for established businesses seeking further expansion.

Eligibility for MUDRA Loans

Any Indian citizen with a viable business plan for a non-farm income-generating activity, including manufacturing, processing, trading, or services, can apply for a MUDRA loan. The applicant's credit requirement should not exceed Rs 10 lakh. This loan is available to individuals, proprietary concerns, partnership firms, private limited companies, and other entities.

Member Lending Institutions (MLIs)

Loans under the MUDRA Yojana are disbursed through Member Lending Institutions (MLIs) such as Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), and other financial intermediaries. These institutions play a crucial role in ensuring the scheme reaches its intended beneficiaries.

Loan Categories and Interest Rates

Loans under PMMY cater to both term loans and working capital needs for income-generating activities. While there is no specific subsidy for MUDRA loans, applicants may benefit from government schemes offering capital subsidies if applicable. The interest rates are determined by lending institutions based on RBI guidelines, and upfront fees may vary depending on the bank’s internal policies. However, most banks waive processing fees for Shishu loans.

Online Application Process for MUDRA Loans

Applying for a MUDRA loan online is straightforward through the Jan Samarth Portal. Here’s a step-by-step guide:

1. Visit the Portal: Go to the government’s Jan Samarth portal and select the 'Business Activity Loan' from the schemes section.

2. Check Eligibility: Click on ‘Check Eligibility’ and select ‘Other Business Loan’ unless you belong to other categories like handloom weavers or street vendors.

3. Enter Business Details: Provide information about your business, its type, location, social category, and estimated cost.

4. Calculate Eligibility: The portal will calculate the loan amount based on your investment and display the monthly EMI and tenure.

5. Login and Apply: Log in with your registered mobile number and review your details.

6. Verify Identity: Confirm your PAN, Aadhaar, and Udyam registration details.

7. Provide Business Information: Submit business details, including GSTIN and bank account verification.

8. Finalize Application: Review and submit the completed form. Once submitted, the portal will display loan offers from various banks.

9. Select Offer: Choose a loan offer based on interest rates and tenure, and proceed with the application process.

Once the loan is approved, the selected bank may conduct further checks, such as branch visits, to finalize the loan sanctioning and disbursement.

Direct Link to Jan Samarth Portal

MUDRA Card

The MUDRA Card is an innovative product designed to provide borrowers with a flexible working capital arrangement. It functions like a credit card, allowing borrowers to withdraw cash from ATMs or make purchases using Point of Sale (POS) machines. This feature helps micro-entrepreneurs manage their business needs while keeping interest costs low, as interest is charged only on the borrowed amount used.

Monitoring and Governance

The progress of the Pradhan Mantri MUDRA Yojana (PMMY) is monitored at both state and national levels. At the state level, oversight is conducted through the State Level Bankers’ Committee (SLBC), while at the national level, it is managed by MUDRA and the Department of Financial Services, Government of India. A dedicated online portal enables banks and lending institutions to report their achievements, ensuring transparency and facilitating an efficient review process.

The Pradhan Mantri MUDRA Yojana is an empowering initiative that offers micro and small businesses an opportunity to grow without the burden of collateral. With flexible products like the MUDRA Card, businesses can manage their finances efficiently, ensuring growth and development. The online application process makes accessing funds easier, enabling a wider section of entrepreneurs to thrive.