A Brief Overview
The Prime Minister Mudra Yojana (PMMY) was launched on 8th April 2015 by the Government of India. Micro Units Development and Refinance Agency Limited (MUDRA) was initiated by the Government to facilitate financial help and support by providing affordable loans to non-corporate, non-farm micro and small enterprises. Moreover it has programs to support small enterprises by financial literacy, sectoral and institutional development. The scheme aims at economic growth and creation of employment in the country.
Types of Loans Under MUDRA
The maximum amount available for loan under MUDRA is Rs 10 Lakh. There are 3 types of loans available under the MUDRA scheme are the following :-
Shishu: The maximum loan available in this category is Rs 50,000. This is meted out for starting a small enterprise.
Kishor: The loan available in this category ranges from Rs50,001 to Rs 1 lakh. This is given for expansion of a small enterprise.
Tarun: This category offers the maximum loan starting from Rs 500001 to Rs.10 lakhs. This loan support is extended to a small enterprise as a part of further growth and diversification.
Types of Funding Support
There are 2 types of funding support systems through which financial help disseminated. These are the following:-
Micro Credit Scheme (MCS): The Micro-Finance Institutions (MFI) have been given responsibility to deliver loans upto Rs 1 Lakh to micro-enterprises. This process may include JLG, SHG and individuals for the delivery of loans.
Refinance Scheme: This kind of funding support includes the NBFCs and Regional, Commercial,Rural Small Finance Banks to avail refinance support for financing small enterprises. A loan amounting to Rs.10 lakh is made available for term and working capital loan per unit. Special facilities are meted out to women entrepreneurs.
Interests for Loans
The interest is nominal and depends on the amount taken and the bank took from. Also, the key guideline followed here is from MCLR (Marginal Cost of Lending Rate) of RBI.
Main Areas of Extending Loan
The MUDRA loans are mainly extended to certain kinds of micro-enterprises for expansion and support. These include transport vehicles for commercial use; Vendors, Traders, Shopkeepers; Food Production Units; Small Textile Enterprises; Equipment Finance; Agri-allied Non-farm Business; and Community, Social & Personal Service Sector.
Eligibility for Availing MUDRA Loan
- Should be an adult (18yrs) of age.
- Should not have any loan defaulter history.
- Should be non-corporate non-farm enterprises.
- Should be wanting to start or expand small finance enterprises.
- Should be a legalized business entity.
Details of MUDRA Loan
- MUDRA Card is a debit card issued to people availing the loan for withdrawals of amounts whenever required. It also helps in keeping digital records of all transactions.
- No collateral security is necessary for availing the loan.
- No processing fee is required for the loan.
- The loan repayment tenure is upto 5 years.
- The MUDRA loans are delivered by several public as well private sector banks and finance institutions
- A loan application can be done through web portals of the banks also.