The Pradhan Mantri Mudra Yojna was launched in the year 2015 and was announced in the Union Budget. The scheme set up a new institution called the Micro Finance Development and Refinance Agency(MUDRA) Bank to provide loans to small entrepreneurs. The aim of the scheme is to provide funds to the unbanked population of the country and help them in setting up new business establishments and creating jobs. Under this scheme, a loan amount of Rs 50,000 to Rs 10 lakhs is credited to small business owners who want to set up their own establishment.
There are three stages that determine the loan amount paid to the beneficiary.
- Shishu- In this stage, the applicant is eligible for a loan upto Rs 50,000. This stage is for those entrepreneurs who are just about to start their businesses or require less fund to get the business started.
- Kishor- In this stage, the applicants are eligible for loan ranging between Rs 50,000 and Rs 5 lakhs. This is suitable for entrepreneurs who require this amount of money to start their businesses or those businessmen who have already started their businesses but require more funds for running the business.
- Tarun- In this stage, the applicant can apply for a loan up to Rs 10 lakhs. This is the maximum amount that can be sanctioned under the scheme. The entrepreneur must need some eligibility conditions before applying for loan under this stage.
The interest rate under this scheme depends upon the bank and the type of business for which loan is being applied. Rate is not fixed. The person availing of this scheme has to repay the loan within 5-7 years. The institutions that can be approached for loans under this scheme under this Yojana are as follows here https://PolicyPedia.com
- Scheduled Commercial banks
- Scheduled Urban Cooperative banks
- Regional Rural Banks
- State Cooperative Banks
- Micro Financial Institutions
27 public sector banks, 27 regional rural banks, 17 private sector banks and 25 microfinance institutions have been enrolled by MUDRA to provide loans to a borrower under this scheme. These lending institutions would sanction a loan amount to the borrower as per the eligibility rules and then approach the MUDRA Bank for refinancing of the sanctioned loans or financial assistance.
Documents required for applying
The borrower needs to approach and enrolled institution and fill up the MUDRA Loan form. Documents required are as follows:
- Self attested proof of identity
- Quotations of items to be purchased
- Details of suppliers
- Identity of ownership of business, business address, licences and certificates
- Caste certificate in case of SC/ST