Pradhan Mantri Mudra Loan Subsidy Yojana
[Application Form, Status,Interest Rate,Calculator, Repayment Schedule,Eligibility, Documents]
PM Narendra Modi has highlighted that the overall development of the country will not be possible without the establishment of small and medium organizations. But such entrepreneurs often fail to make it big in the industry as they lack financial backing. To aid these business owners, the central government has designed and developed a unique scheme. Under this scheme independent small and medium organization owners will be able to apply and get financial credit from the selected banks.Applicants will be able to use this cash for the development of their business.With this unique project, organization owners will no longer have to worry about paying high interests. If you are interested in this credit scheme, then read this article on Mudra Loan.
|Name of the scheme||Pradhan Mantri’s Mudra Loan Scheme|
|Launched by||Narendra Modi|
|Date of announcement||April 2015|
|Types of loans available||Shishu, Kishor and Tarun categories|
|Target beneficiaries||Small and medium business owners|
|Supervised by||Indian Finance Ministry|
|Budget allocated||Rs. 20,000 crores|
Categories under the Mudra Loan Scheme
- Shishu Loan Category – The central government has states that all interested applicants, desiring small financial amounts, for their start-up, will be able to register under the Shishu category. The maximum amount of credit, available under this category is Rs. 50,000. It will be beneficial for those who are just starting out, or have less financial requirements.
- Kishor Loan category – Business owners, who desire additional financial assistance, will be able to enroll under the Kishor category. As per this, all applicants will be able to attain anything between Rs. 50,000 and Rs. 5 lakhs aid. It will come in handy for those who desire to purchase trade oriented machinery.
- Tarun Loan category – This category will help those business owners, who already have a business. They require significant financial aid to expand their business. Under the Kishor category, applicants will receive anything between Rs. 5 lakhs and Rs. 10 lakhs.
How will a candidate apply for Mudra Loan?
- Not all banks have been selected by the central government to issue Mudra Loans. Interested applicants can check the list from the internet, and then visit any nearest branch for more information.
- The applicant must get in touch with the bank representatives, and submit necessary documents, highlighting the details of the organization. It is the responsibility of the bank representative to check these papers and then place the trader’s request under one of the three categories.
- After this, applicants need to fill in necessary forms to start the account opening process in that bank. Then he/she must fill in some documents and apply for the Mudra loan officially.
- The banks will not charge any fee or collateral from the trader. Once all documents are filled in and submitted, the bank representatives will check these. Finally they will proceed towards the approval of the loan.
Rate of interest under Mudra Loan
- Shishu Interest Rate – If the applicant applies under this category, then he/she will have to pay an interest at 10% to 12% on the credit amount.
- Kishor Interest Rate – Applicants, who attained loan under this category, will have to pay an interest at 14% to 17%.
- Tarun Interest Rate – The interest rate, charged under Tarun category will vary from one bank to another. However, the starting level of the interest rate calculation is 16%.
How to attain the application form for Mudra Loan?
- The application form is available in all the branches of selected banks. These forms will be provided to the interested applicants free of cost from the bank counters.
- Once the form is filled, the applicants will have to attach several documents with the application form.
- One can also attain the digitized version of this application form from the official site. For this, the candidate must click on the link http://www.mudra.org.in/.
Eligibility to attain Mudra Loan
- Residential criterion – The development of this scheme has been done to offer encouragement to Indian citizens to take a step in the business sector. With financial worries gone, more people will be able to realize their dreams. All applicants must be citizens of India, and have their business based in this country. Otherwise, they will not get the credit.
- Size of the organization – The implementation of this scheme has been done to help micro, small and medium business organizations. If the agency does not fall in these categories, or does not have this registration, then the applicant will not get aid under this scheme.
Documents necessary for attaining Mudra Loan
- Identity proof – It is necessary for the loan applicant and the owner of the business organization to submit his/her identity proofs. Submitting the PAN card, voter card, ration card and other such documents will be accepted.
- Residential documents – As only citizens of India will be able to get the loan, applicants have to submit their domicile certificates as well.
- Business documents – The registration certificate, issued in the name of the organization, and PAN card, issued in the name of the agency, must be submitted along with the application form.
- IT documents – Only those organizations will be able to get the financial aid, which are registered with the IT department. All income tax return papers must be submitted along with the application.
- Partnership certificates – Several organizations have different types of partnership agreements. It is mandatory for all applicants to furnish these papers.
- Bank statements – Applicants will also have to submit their bank account related documents. It must highlight the name of the account number, bank and branch name code and address.
- Rental documents – In case the organization operates out of a rented building, then applicants must showcase the rental papers.
- SSI / MSME certificates – The certificates, issued by central government, highlighting the approval of SSI / MSME is also an important document.
- Balance sheets – It is mandatory for business owners to maintain their balance sheets. These help the owners to keep track of the inflow and outflow of cash. These balance sheets must be submitted during application.
Mudra Loan repayment tenure
The central government has states that business owners will be no longer have to worry about the speedy repayment of the loan amount. Earlier the tenure for repayment of Shishu, Kishor and Tarun was 5 years. But now, the central government has decided that applicants will be able to get an additional 2 years. Thus, the total tenure of loan repayment is 7 years.
Helpline number for Mudra Loan
If you have any queries about this scheme, or need to register some grievance, then you can talk to the help desk executives directly. The central government has started a helpline that will help people to attain all sorts of scheme-related details. 18001801111 and 1800110001 are the two helpline numbers. These will operate 24 hours, and on all seven days.
Special features of Mudra Loan for female applicants
The central government also wants more and more female entrepreneurs to make the most of this opportunity. Thus, women business owners will attain special benefits under this scheme. Female applicants will be able to attain credit as special budget. The applicants can use this money to open small agencies and shops. They will be able to invest in beauty parlors, tailoring units, handicraft stores etc. Around 70% of all applicants, who have already received credit under this scheme, are women. The central government is hopeful that more female business owners will apply for this financial aid.
Special features for people from backward classes
It is not often that people from ST, SC and OBC categories succeed in getting loans from banks. With the implementation of the Mudra scheme, people with ST, SC and OBC caste certificates will be able to attain credit at low interest rates. The reports submitted by the central government suggest that 20% of all applicants belong to the SC category. 5% and 35% of the credit holders fall in the ST and OBC categories.
Sectors covered by Mudra Loan
Transport, community oriented services, textile factories, food manufacturing industries, personal care items were selected as preferred sectors, which will attain credit assistance. But now, central government has included many more areas in this list. It paves the path for participation of more entrepreneurs in the development of the Indian trade sector.
Mudra Loan from SBI
The State Bank of India or the SBI is the biggest banking entity in the Indian financial market. It has numerous loan schemes, targeted towards people from all walks of life. The repayment interest rates are also comparatively lower than the private sector financial institutes. Business owners will be able to get Mudra loan from the any SBI branch. Once the loan has been sanctioned, applicants will have to repay the loan before the completion of 5 years. The processing fee that the bank charges is also around 0.5% lower.
Difference between Mudra and Personal Loans
- Only business owners, who are associated with the manufacturing sector directly, will be able to apply and attain this Mudra loan. On the other hand, people from all walks of life will be able to get personal credit from financial institutes. They can meet all types of requirements with this credit.
- Only public banks, operated by the central government, will be able to issue this credit to interested business owners. However, applicants can get personal credit from private as well as public sector banks.
- Applicants will have to pay anything between 10% and 16% interest. This rate will depend on the category of Mudra Loan they apply for. On the other hand, applicants will have to pay anything between 10% and 22% in case of personal loans. This percentage depends on loan amount, repayment period and category.
- Applicants must possess a separate account and the Mudra card to attain this credit. To get a personal loan, applicant needs an active personal account in the banks.