The Government of India introduced the PMMY or Pradhan Mantri MUDRA Yojana in the FY 2016 Budget.
The scheme aims to provide non-corporate small businesses with financial assistance via the Pradhan Mantri MUDRA loan.
It bridges the gap between over 90% of enterprises of this sector and formal financing.
MUDRA primarily emphasises on the 5.75 Crore self-employed individuals who recruit 12 Crore people in India.
The PM’s take on MUDRA Loan
Recently, the honourable PM Narendra Modi revealed that MUDRA loans of Rs. 1 Lakh Crore under PMMY had been disbursed to small business owners.
Through this, the government encourages the youth to become job creators while opening employment opportunities for others.
As PM Modi said, 65% of the Indian population is under 35 years of age. Boosting entrepreneurship was essential for the advancement of the youth.
Through this MUDRA Yojana, the GoI moves forward with the economic principle of making every individual and household self-sufficient.
How MUDRA Yojana extends financial help?
Small business owners can apply for a MUDRA loan up to a limit of Rs. 10 Lakh for their non-farming enterprising setup. This financial assistance is easy to avail as borrowers need not keep any collateral against the sanctioned amount.
Here is MUDRA loan demystified for you.
Based on the stage of business growth and financial requirements, this loan for start-ups is categorised into 3 variants.
- Shishu – Funds up to Rs. 50,000 for businesses to get started.
- Kishor – Funds between Rs. 50,000 and Rs. 5 Lakh for business looking to expand with fresh finance.
- Tarun – Funds within Rs. 5 Lakh to Rs. 10 Lakh for established enterprises looking to diversify or grow further.
Here, the target is to ensure 60% credit flow towards the Shishu category and the remaining to Kishor and Tarun category unites.
The Pradhan Mantri MUDRA loan has no processing charges or minimum amount to apply. The interest rate of the credit depends on the lending institution via which the applicant borrows the loan amount.
Who qualifies for a loan under PMMY scheme?
As per eligibility, the following can apply for MUDRA loan under PMMY.
- Every non-farm and non-corporate businesses.
- Enterprises associated with allied agricultural services since April 1, 2016.
- Enterprises engaged with trading, manufacturing and services.
- Entities whose credit requirement is within Rs. 10 Lakh.
Note that, you must find your business niche if opening a new venture or penetrating newer avenues.
Which documents are needed to apply?
Some of the necessary documents applicants need to submit are below –
- Residential proof via an electric bill, telephone bill, Aadhaar card, passport, voter, etc.
- Quotation of the items to be purchased, including machinery.
- Caste certificate of SC, ST, OBC, if applicable.
- Address of business or identity proof.
- A recent photograph of the applicant, etc.
You can apply for the Pradhan Mantri MUDRA loan via an online application form. Submit the duly filled form at the nearest lender’s branch along with the above-mentioned documents.
Business loans from NBFCs for higher financing
If your small business requires high-value financing, you can apply with reputed NBFCs such as Bajaj Finserv. Avail business loans of up to Rs. 30 Lakh at attractive interest rates. Expend or invest the amount in diverse requirements of your venture without any restriction.
There are unique benefits of business financing with Bajaj Finserv including –
- Collateral-free loan.
- Online account management.
- Flexi Loan facility.
- No hidden charges.
- 100% transparent policy.
- Simple eligibility criteria.
Additionally, the NBFC brings pre-approved offers on business loans, home loans, personal loans and a plethora of financial products. Such schemes not only make the credit availing process less complicated but also less time-taking.
While pre-approved offers are for existing customers, eligible borrowers can submit an online form to complete the application process easier. The NBFC also offers doorstep document collection facility for the convenience of borrowers.
A variety of advances, including Pradhan Mantri MUDRA loan, are available customised for specific needs. Ensure to assess your purpose and opt for the appropriate credit option to drive your business venture successfully.