Micro Units Development and Refinance Agency (which is MUDRA full form) Loan scheme under Pradhan Mantri Mudra Yojana (PMMY) is an initiative by Government of India that offers loans to individuals, SMEs and MSMEs. The Pradhan Mantri Mudra Yojana (PMMY) was stablish by the Prime Minister of India on April 8, 2015. About An acronyms for Micro Units Development and Refinance Agency (MUDRA), this is a organisation setup by the government to fund the income-generating activities of micro and small enterprises in the non-farming, non-corporate sector. The Mudra loan, offered as a part of the Pradhan Mantri Mudra Yojana, allows eligible enterprises to borrow funds as high as Rs. 10 lakhs.
According the PMMY there are three loan products, namely, ‘Shishu’, ‘Kishore’ and ‘Tarun’, based on the stage of development and funding needs of the micro-unit. And here are The entities can borrow loans upto ₹ 10 Lakh to meet their capital needs and operating costs through easy finance schemes of PMMY.These loan products are known as Mudra Loans.
Shishu Yojana : Shishu Yojana is very demanding products in this segment. And This category of Mudra Loan is best suited for micro or small business owners. Under this scheme, one can apply for up to ₹ 50,000 loans. Shishu loans are for business owners who need small capital to start their business. Applicants need to present their business idea to get their loan application approved.
Kishor Yojana: about This types of category is meant for the business owners who have already started their business and want to expand it as a viable enterprise. The applicants can apply for a loan amount ranging from ₹ 50,000 to ₹ 5 Lakh. To apply for the loan, borrowers must fill in the application form and furnish the documents to showcase the current status of their organisation.
Many types of business owners can apply for a loan under this scheme. And Borrowers can apply for up to ₹ 10 Lakh loan.
Features Of Mudra Loan (PMMY)
The Mudra loan has a number of defining features that make it one of the best financial products offered by the Government of India. And Here’s a look at the primary characteristics of this loan.
Its like a essentially a working capital term loan.
It can be used for a variety of purposes, including capacity expansion, modernization, meeting working capital requirements, purchase of plant and machinery, and renovation of business premises, among others.
The loan is offered to both new and existing units.
The target group of the Pradhan Mantri Mudra Yojana includes businesses involved in manufacturing, trading, or providing services. This is inclusive of allied agricultural activities.
The repayment period ranges from 3 years to 5 years.
An eligible enterprise can avail the Mudra loan onine.
Purpose of Mudra Loan
The Micro, Small and Medium type of Enterprises (MSMEs) have contributed significantly to the growing economy of India. The other form are depends that, MSMEs also play a crucial business in generating job opportunities across the nation. And Keeping all factors in mind, the Indian Government has established Micro-Units Development and Refinance Agency (MUDRA) to offer financial support to small businesses and startups in India.
The MUDRA loan is approved and disbursed by public and private banks and NBFCs registered under this scheme. Here are The primary benefit of this loan is that it is provided without any collateral. The capital obtained from a MUDRA loan scheme can be utilized to grow and expand businesses.
The main time table below displays the number of loans sanctioned under the PMMY scheme in the past few years.
Benefits of Taking a Mudra Loan
The besic benefit of Mudra loan is that this loan is provided without any collateral. This makes MUDRA loans unsecured loans
The interest rate of Mudra Loan doesn’t exceed 1.00% per month and it also depends on the base lending rates of the interest and the Beneficiaries do not have to visit the bank for withdrawal of the loan amount. This can be done by using the Mudra Loan Card.
The Mudra scheme is are covered under Credit Guarantee Schemes from Govt. of India
All Availed loan amount can also be used as term loans and overdraft facilities
All Non-farm enterprises, i.e. small or micro firms engaged in the income generating activities can avail Mudra loan
Who can apply the mudra loan.
Here are the many types of eligible persons can apply the loan which is given below
Business vendors and shopkeepers
Food production sector
Service sector firms
Vision of Pradhan Mantri Mudra Yojana
Here are the many reasons behind the Mudra scheme can be availed to perform various income generating activities as mentioned below:
Commercial Vehicle. Purchase of commercial transport vehicles like tractors, auto-rickshaws, taxis, trollies, tillers, goods transports vehicles, 3-wheelers, e-rickshaws, etc.
Service Sector Activities: Starting businesses of salons, gyms, tailoring shops, medicine shops, repair shops, and dry cleaning and photocopying shops, etc.
Food and Textile Product Sector Activities:Various activities involved in respective sector
Business activities for Traders and Shopkeepers:Setting up shops, service enterprises, trading and business activities and non-farm income generating activities
Equipment Finance Scheme for Micro Units: Maximum loan up to Rs. 10 lakh
Agri-allied Activities: Activities related to businesses in agri-clinics and agribusiness centres, food & agro-processing units, poultry, pisciculture, bee keeping, sorting, livestock-rearing, grading, aggregation agro industries, diary, fishery, etc.