What is mudra loan?
The Mudra Loan scheme was launched by the Government of India on April 8, 2015. The initiative, officially named the “Pradhan Mantri Mudra Yojana (PMMY),” aims to provide financial support to micro-enterprises and small businesses in the country. The program encourages entrepreneurship and self-employment by offering loans through various financial institutions, including banks, NBFCs (Non-Banking Financial Companies), and microfinance institutions.
Mudra loan is a financial product in India that provides funding to small and micro-enterprises. Launched by the Indian government, Mudra (Micro Units Development and Refinance Agency) aims to support entrepreneurs in the non-corporate, non-farm sector by offering loans through various financial institutions. These loans are categorized into three schemes: Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), and Tarun (₹5,00,001 to ₹10 lakh), catering to different business needs and stages.
What is the eligibility criteria?
Eligibility for Mudra loans is typically extended to individuals, small businesses, and micro-enterprises engaged in non-farm income-generating activities. Some common eligibility criteria include:
1. Micro and Small Enterprises: Entities engaged in manufacturing, trading, or services sectors can apply.
2. Loan Amount Categories: Individuals and businesses seeking small loans falling under Shishu, Kishore, or Tarun categories.
3. Specific Sectors: Focus on supporting businesses in the non-corporate and non-farm sectors.
4. Repayment Capacity: Borrowers should demonstrate their ability to repay the loan.
5. No Default History: Individuals or businesses with a clean repayment track record.
It’s essential to check with the specific financial institutions or banks providing Mudra loans for detailed eligibility criteria as they may have variations based on their policies and guidelines.
How to apply for mudra loan?
To apply for a Mudra loan, follow these general steps:
1. Choose a Financial Institution: Select a bank, microfinance institution, or NBFC (Non-Banking Financial Company) that is a part of the Mudra loan scheme.
2. Visit the Branch: Go to the chosen financial institution’s branch and inquire about Mudra loans. You can also check their website for application details.
3. Get Information: Collect information about the Mudra loan categories – Shishu, Kishore, and Tarun, and choose the one that suits your business needs.
4. Application Form: Fill out the Mudra loan application form provided by the financial institution. Include details about your business, income, and the purpose of the loan.
5. Submit Documents: Submit the necessary documents, which may include identity proof, address proof, business registration documents, and other relevant records.
6. Loan Officer Interaction: Be prepared for an interaction with a loan officer who may assess your business and financial situation.
7. Loan Approval: Once your application is processed and approved, the loan amount will be disbursed to your account.
Remember that the specific procedures may vary slightly among different financial institutions, so it’s advisable to check with the chosen bank or financial entity for precise application requirements and processes.
Which banks provide mudra loan?
Many banks and financial institutions in India offer Mudra loans. Some of the prominent banks participating in the Mudra loan scheme include:
1. State Bank of India (SBI): Being one of the largest public sector banks in India, SBI actively participates in the Mudra Yojana. To apply Click here
2. Bank of Baroda (BOB): BOB is another major public sector bank that provides Mudra loans to eligible individuals and businesses. To apply Click here
3. ICICI Bank: This private sector bank is also involved in offering Mudra loans to support small and micro-enterprises. To apply Click here
4. HDFC Bank: As one of the leading private banks, HDFC Bank is part of the Mudra Yojana, catering to the financial needs of small businesses. To apply Click here
5. Punjab National Bank (PNB): PNB, a public sector bank, is actively involved in providing Mudra loans to promote entrepreneurship.
6. Canara Bank: This public sector bank is among the institutions supporting the Mudra initiative by offering financial assistance to micro-enterprises.
7. Axis Bank: Another private sector bank participating in the Mudra Yojana, providing financial assistance to small and micro-businesses.
It’s important to note that the list is not exhaustive, and many other regional rural banks, cooperative banks, and NBFCs (Non-Banking Financial Companies) also participate in the Mudra loan scheme. Interested individuals can check with their local branches or visit the official websites of these banks for more details on Mudra loan offerings.
What is the interest rate of mudra loan?
The interest rates for Mudra loans can vary among different financial institutions and are generally competitive. These rates are often influenced by factors such as the borrower’s creditworthiness, loan amount, and tenure.Mudra loans interest rates were typically in the range of 8% to 12%, depending on the specific category (Shishu, Kishore, or Tarun) and the lending institution.
It’s crucial to check with the particular bank or financial institution you plan to apply to for the most accurate and up-to-date information on Mudra loan interest rates, as these rates might be subject to periodic revisions and can vary across different lenders.
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