What is PM Mudra Yojna or Mudra Scheme?
PM Mudra Yojana is a scheme launched by the Government of India in 2015 to provide financial assistance to small and micro enterprises. “MUDRA” stands for Micro Units Development and Refinance Agency.
The primary objective of PM Mudra Yojana is to encourage entrepreneurship, job creation, and small-scale industries in the country. Under this scheme, loans of up to Rs. 10 lakhs are provided to non-corporate, non-farm small/micro-enterprises.
The loans are classified into three categories based on the loan amount: Shishu (up to Rs. 50,000), Kishore (Rs. 50,001 to Rs. 5 lakh), and Tarun (Rs. 5,00,001 to Rs. 10 lakh). The loans can be availed from any commercial bank, regional rural bank, cooperative bank, small finance bank, or non-banking finance company (NBFC) registered under MUDRA.
The scheme has been successful in providing access to credit to small entrepreneurs who were previously underserved by the formal financial system. It has also helped in promoting financial inclusion and economic growth.
PM Mudra Scheme Features
- Objective: The main objective of the PM Mudra Yojana is to provide financial assistance to small and micro-enterprises, especially those owned and operated by women, who find it difficult to get loans from traditional sources.
- Types of loans: The PM Mudra Yojana offers three types of loans: Shishu (up to Rs. 50,000), Kishor (Rs. 50,000 to Rs. 5 lakh), and Tarun (Rs. 5 lakhs to Rs. 10 lakh).
- Interest rates: The interest rates for loans under the PM Mudra Yojana are generally lower than those offered by traditional sources of funding. The interest rate may vary depending on the lending institution.
- Repayment period: The repayment period for loans under the PM Mudra Yojana may range from 3 to 5 years, depending on the loan amount and the terms and conditions of the lending institution.
- No collateral: Loans under the PM Mudra Yojana do not require collateral or security, making it easier for small and micro-enterprises to get access to funding.
- Online application: The PM Mudra Yojana allows borrowers to apply for loans online through the Mudra portal, making the loan application process more streamlined and efficient.
- Direct benefit transfer: The loan amount is disbursed directly to the borrower’s bank account, eliminating the need for intermediaries, and reducing the chances of fraud or misappropriation.
PM Mudra Yojna Eligibility
- Any Indian citizen who is engaged in non-farm income-generating activities, such as manufacturing, trading, or services, is eligible for a loan under the scheme.
- The borrower should have a business plan or proposal that outlines the purpose of the loan, the amount required, and the repayment schedule.
- The borrower should not have defaulted on any previous loans taken from any financial institution or bank.
- The borrower should not be a defaulter of any loan provided by any bank or financial institution.
- The borrower should not be a beneficiary of any other government loan scheme for the same business purpose.
- Priority is given to women, SCs, STs, and OBCs while disbursing loans under the scheme.
- The borrower should have a valid KYC (Know Your Customer) document, such as Aadhaar Card, Voter ID, Driving License, or Passport.
- The borrower should provide the necessary documents, such as proof of business ownership, business address proof, and financial statements, as required by the lending institution.
PM Mudra Yojna Enrolment Process
The enrolment process for PM Mudra Yojana involves the following steps:
- Identify the lending institution: The first step is to identify a lending institution that is registered under the PM Mudra Yojana. You can find a list of registered institutions on the official PM Mudra Yojana website or by contacting the nearest branch of a public sector bank.
- Fill the loan application form: The next step is to fill the loan application form, which is available online on the Mudra portal or can be obtained from the lending institution’s branch. You will need to provide details such as your name, address, business details, loan amount, and repayment period.
- Submit the loan application form: Once you have filled the loan application form, you need to submit it along with the required documents, such as proof of business ownership, business address proof, and financial statements, to the lending institution.
- Application verification: The lending institution will verify your loan application and supporting documents to determine your eligibility for the loan.
- Loan sanction: If your loan application is approved, the lending institution will sanction the loan amount based on your eligibility and creditworthiness.
- Loan disbursement: After the loan is sanctioned, the lending institution will disburse the loan amount directly to your bank account.
It is essential to note that the loan approval process may vary from one lending institution to another. You should check the specific requirements and procedures of the lending institution before applying for a loan under the PM Mudra Yojana.
PM Mudra Scheme Benefits
- Access to credit: The scheme provides financial assistance to small and micro-enterprises, especially those owned and operated by women, who find it difficult to get loans from traditional sources.
- No collateral required: The scheme does not require collateral or security, making it easier for small and micro-enterprises to get access to funding.
- Lower interest rates: The interest rates for loans under the PM Mudra Yojana are generally lower than those offered by traditional sources of funding, making it more affordable for small and micro-enterprises to take loans.
- Three types of loans: The scheme offers three types of loans, namely Shishu, Kishor, and Tarun, based on the stage of business development, which allows small and micro-enterprises to choose the loan that meets their specific requirements.
- Easy application process: The PM Mudra Yojana allows borrowers to apply for loans online through the Mudra portal, making the loan application process more streamlined and efficient.
- Direct benefit transfer: The loan amount is disbursed directly to the borrower’s bank account, eliminating the need for intermediaries, and reducing the chances of fraud or misappropriation.
- Employment generation: The scheme aims to promote entrepreneurship and employment generation in the country by providing financial assistance to small and micro-enterprises.
- Priority to women and marginalized communities: The scheme prioritizes women, SCs, STs, and OBCs while disbursing loans, which helps in promoting financial inclusion and gender equality.
Conclusion
In conclusion, PM Mudra Yojana is a flagship scheme of the Government of India that aims to provide financial assistance to small and micro-enterprises in India. The scheme offers loans without collateral to Indian citizens engaged in non-farm income-generating activities such as manufacturing, trading, or services. It has three types of loans- Shishu, Kishor, and Tarun- based on the stage of business development.
The scheme promotes entrepreneurship, employment generation, financial inclusion, and gender equality by prioritizing women, SCs, STs, and OBCs while disbursing loans. The scheme also provides easy application processes, lower interest rates, and direct benefit transfer of loan amounts. Overall, PM Mudra Yojana is a well-designed scheme that is helping small and micro-enterprises in India to grow and create more job opportunities. For more Central Government Schemes.
Frequently Asked Questions
What is PM Mudra Yojana?
PM Mudra Yojana is a government scheme launched in 2015 to provide financial assistance to small and micro-enterprises in India.
Who is eligible for loans under PM Mudra Yojana?
Indian citizens engaged in non-farm income-generating activities such as manufacturing, trading, or services, with a business plan or proposal outlining the purpose of the loan, are eligible for loans under PM Mudra Yojana.
What is the loan amount under PM Mudra Yojana?
The loan amount under PM Mudra Yojana varies from Rs. 50,000 to Rs. 10 lakhs, depending on the type of loan.
What is the interest rate for loans under PM Mudra Yojana?
The interest rates for loans under PM Mudra Yojana vary from bank to bank and can range from 8% to 12%.
Is collateral required for loans under PM Mudra Yojana?
No, collateral is not required for loans under PM Mudra Yojana.
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