Thanks to the Indian Government for introducing a Loan scheme that helps small scale entrepreneurs to set up and meet the expenses. The Mudra Loan, also called the Pradhan Mantri Mudra Yojana, is a flagship launched by the Indian Prime Minister, Narendra Modi.
The Mudra Loan aims to offer funds for non-farming and non-corporate micro and small enterprises. The Loan works under three different categories wherein the amount provided differs.
Features
- The maximum Business Loan you can avail of under this scheme is Rs. 10 lakh categorised into Rs. 50,000 under Shishu, Rs. 50,000 to Rs. 5 lakh under Kishore, and Rs. 5 lakh to Rs. 10 lakh under Tarun.
- There is a zero-processing charge involved.
- The processing time of the Loan is 24 hours and the repayment period is three to five years.
Benefits
- The targeted customers of Mudra Loans are small-scale and micro-enterprises who need funds for business purposes.
- The best thing about the Loan is you need not provide any collateral.
- Within 24 hours, it gets processed. Also, there are no additional charges for processing the scheme.
- You can apply for the Loan as overdraft, letter of credit, investment, or bank guarantee, whichever suits your requirement.
- The Loan does not prescribe any minimum amount.
Eligibility criteria
Any Indian citizen who plans to set up their business or expand it can get a Mudra Loan. Companies and entities that fall under the following category can apply for the scheme:
- All non-corporate non-farming entities
- Manufacturing, trading, or service company
- Companies who need funds of up to Rs. 10 lakh or lower
Others who can apply
- Vegetable and fruit dealers
- Small scale entrepreneurs who deal with the manufacturing of goods and services
- Shopkeepers
- Small scale shopkeepers
- Individuals engaged in agriculture
Documents required
Following are the documents required at the time of application. Not each of these documents is necessary. It depends on the Loan type you apply for. For instance, a Vehicle Loan requires less documentation than a Business Loan:
- Loan application form
- Income proof
- ID proofs
- Address proofs
- Bank statement for the last six months
- Two recent passport size photographs
- Two years of income tax returns
- BIL application form
- Establishment proof
- Ownership proof of residence or office
- Proof of business continuity
- Bank statement of the last 12 months
Author bio:
Neha Sharma, a finance student, loves to write in her free time. She has spent considerable time researching Mudra Loan. Through her work, she explains everything about the same
