
To create a sustainable and inclusive entrepreneurial environment, the Prime Minister launched the Pradhan Mantri MUDRA Yojana (PMMY) on 8th April 2015. The major purpose of these MUDRA business loans is to generate income and employment. With the support of PMMY, MUDRA launched three schemes, namely ‘Shishu’, ‘Kishore’, and Tarun. Read on as we learn about what these schemes are, what they signify, the eligibility criteria, and more.
What is Mudra Yojana?
MUDRA Yojana is a flagship programme by the Government of India that covers loans of up to ₹10 lakhs. These loans are offered to non-farm and non-corporate micro and small companies. MUDRA scheme aims to boost the confidence of youth to emerge as first-generation entrepreneurs and help small businesses expand their services and activities.
What are the Benefits of Mudra Yojana?
MUDRA Yojana offers a variety of benefits. From being the top refinancer to reducing the finance cost, while making funding accessible to everyone, MUDRA makes entrepreneurship a level playing field. Here are some of the notable benefits of this scheme:
The MUDRA loans are unsecured which means there is no extensive collateral requirement for the same.
The scheme offers loans of up to ₹10 lakhs. Starting from loans of ₹50,000 under the Shishu category to loans of up to ₹10 lakhs under Tarun, MUDRA aims to empower and grow small and micro entities.
To ensure MUDRA loans are easily accessible to anyone in need, given they meet the eligibility criteria, the procedure to avail of the loans is simple and easy. You need no collateral plus it is easy to get your loans sanctioned.
The best thing about MUDRA loans is that they offer multi-purpose funds. These loans can be used for everything, ranging from business expansion and working capital management to day-to-day operations or purchase of new machinery.
3 Mudra Yojana Schemes
MUDRA loans are available in three categories. These categories, Shishu, Kishor, and Tarun, mark the developmental stage and the funding requirements of the company. Additionally, these schemes can also be seen as a reference to understanding the next growth stage of the enterprise. Here are the schemes and their loan limits:
Under this scheme, the loans can be availed up to ₹50,000.
Kishor covers loans above 50,000. Its financial limit is ₹50,001 to ₹5 lakhs.
For loans exceeding ₹5 lakhs. The loan limit under Tarun ranges between ₹5 lakhs to ₹10 lakhs.
Eligibility for Mudra Yojana Schemes
Here is the list of eligible borrowers under the MUDRA scheme:
What are the Required Documents for Mudra Yojana?⁴
Before you apply for MUDRA loans, make sure to have all your essential documents ready. Here is a checklist to ensure what you need.
Bottom Line
The Government of India launched MUDRA loans to boost the entrepreneurial spirit of the country. This is why the procedure, eligibility criteria, and other availing features of the scheme are made easy and simple. These loans can be used as great opportunities for individuals with great business ideas but lack funding. However, the interest rates on these loans are charges based on the lender's policies; the loan's repayment features are subtle and allow repayment in instalments. With MUDRA loans, small and micro businesses have access to capital by simply tapping into any bank branch over the country.