launched by the Government of India Pradhan Mantri Mudra Yojana (PMMY) An important scheme for small traders, startups and people starting self-employment. Under this scheme, loans up to ₹ 10 lakh are provided to small and micro enterprises in the non-agricultural sector without any major collateral.
If you want to start your new business or expand your already running business, Mudra Yojana can be a great option for financial assistance for you.
What is Pradhan Mantri Mudra Yojana?
Pradhan Mantri Mudra Yojana was launched on 8 April 2015. Its objective is to provide easy and accessible loans to small businesses, shopkeepers, artisans, service providers and self-employed people.
This scheme is specially designed for entrepreneurs who need capital to start or expand their business.
Main benefits of PM Mudra Yojana
✔ Business loan up to ₹10 lakh
✔ Loan facility without huge collateral
✔ Available for both new and existing businesses
✔ Promotion of self-employment and entrepreneurship
✔ Creation of new employment opportunities
✔ Easy application process
✔ Useful for both rural and urban areas
Types of loans available under Mudra Yojana
| Category | loan amount |
|---|---|
| Shishu | up to ₹50,000 |
| Kishore | ₹50,001 to ₹5 lakh |
| Tarun | ₹5 lakh to ₹10 lakh |
1. Shishu Loan
It is for those who want to start their new business and need initial capital.
2. Kishore Loan
For entrepreneurs who have established their business and want to expand.
3. Tarun Loan
For businesses that want to expand or invest on a large scale.
PM Mudra Loan interest rate
The interest rate under Mudra Scheme may vary across banks and financial institutions. Generally the interest rate can be around 19% to 21%, depending on the loan amount, credit profile and policies of the bank.
Who can apply?
The following types of non-agriculture businesses can apply for Mudra Loan:
- small traders
- grocery store operator
- service provider
- transport business
- repairing unit
- beauty Parlour
- tailoring unit
- Food Processing Unit
- Small Manufacturers (Manufacturing Units)
- Youth starting startups and self-employment
Keep in mind that the credit requirement of the business should not exceed ₹10 lakh.
Documents required for Mudra Yojana
Identity Proof
- Aadhar card
- PAN card
- Voter ID
- driving license
- Passport
Address Proof
- Aadhar card
- Voter ID
- driving license
- Passport
- Electricity or water bill (if asked for)
Income and business related documents
- Bank statement of last 6 months
- Latest ITR (if applicable)
- business plan
- proof of business
- Trade License (if applicable)
- Residence or office ownership proof
Objectives of Pradhan Mantri Mudra Yojana
| Objective | Description |
| financial assistance | Providing easy loans to small businesses |
| entrepreneurship development | Encouraging new entrepreneurs |
| employment generation | Increasing self-employment and employment opportunities |
| financial inclusion | Connecting people away from banking services |
| social empowerment | Giving priority to SC/ST and weaker sections |
How to apply for PM Mudra Loan?
You can follow the following steps to apply for Mudra Yojana:
online application
- Visit the official website of the bank.
- Fill the Mudra Loan Application Form.
- Upload the required documents.
- Submit the application.
- The loan will be approved by the bank after verification of the documents.
offline application
- Visit any bank, NBFC or microfinance institution branch.
- Get Mudra Loan Application Form.
- Fill the form and attach the required documents.
- Deposit at the branch.
- The loan process will be completed after verification.
Key Features of Mudra Scheme
- Loan up to ₹10 lakh
- Facility without huge collateral
- Special scheme for small businesses
- easy application process
- Flexible repayment period
- Useful for both starting and expanding business
Repayment Period of Mudra Loan
The repayment period of Mudra Loan can usually range from 1 year to 5 years. This period may vary according to the bank and loan conditions.
Frequently Asked Questions (FAQs)
Q1. What is Pradhan Mantri Mudra Yojana?
This is a scheme of the Government of India under which loans up to ₹ 10 lakh are given to small and micro businesses.
Q2. What is the maximum amount that can be availed for Mudra Loan?
A maximum loan of up to ₹ 10 lakh can be obtained under the Mudra Scheme.
Q3. Is it necessary to give guarantee for Mudra Loan?
In most cases, large collateral is not required, but the final decision rests with the bank.
Q4. Which currencies are eligible for loan?
Small businesses, traders, service providers and self-employed individuals operating in the non-agricultural sector can apply.
Q5. How many types of loans are available in Mudra Yojana?
There are three types of loans available—Shishu, Kishore and Tarun.
Q6. Can Mudra loan be availed for starting a new business?
Yes, individuals starting a new business can also apply under the Shishu category.
Q7. What documents are required for application?
Aadhaar card, PAN card, bank statement, identity and address proof and business related documents may be required.
Q8. How much time does it take to get the Mudra Loan amount?
The loan is approved after document verification and completion of the bank’s process. Timings may vary depending on the bank.
conclusion
Pradhan Mantri Mudra Yojana is an important government initiative to promote small businesses and self-employment. If you want to start your own business or expand your existing business, this scheme can prove to be an effective means of financial assistance for you. Before applying, be sure to get complete information about eligibility, interest rate and documents.
