Get loan from Mudra Yojana to start a business

How to get loan from Mudra Yojana, Scheme Types, Form, Subsidy, Interest Rate, Application, Online Apply, Eligibility Criteria, Required Documents

The new scheme called Mudra Yojana is started by the government to help the people to start their business. The importance of the scheme is lying there; it will help the people by providing financial help. The loan will make the people independent as they do not have to rely on the loans that come with higher rate of percentage. Earlier people used to take loan from the private bank or a person that will end up paying them with higher interest rate. The article is going to talk about the details related to the loan scheme.

Mudra Loan Scheme

What is Mudra Loan?

The government has tied up with the regional and state financial institution to offer loan to the people who are associated with the micro-unit business and refineries will be getting the financial facility from the scheme. The people associated with business or who have start-up companies will get 50, 000 to 10,00,000 rupees from the government as loan.

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Types of Mudra Loans

There are three main types of loan is available and they are described in this article.

  • Shishu category- The people who are associated with small business will come under this category. According to the government’s rule, the small scale business will get 50, 000 rupees as loan. The category is for the people who have started their own business in small scale and in order to get the loan you need to present your business plan before the authority.
  • Kishore Category- The category is for the entrepreneurs who have already started their business. Under the scheme the businessmen will get a loan amount of 50, 000 rupees to 5 lakh rupees.
  • Tarun Category- According to the rules, the loan is granted to the businessmen who already have an established business and not only that but also the business needs to be in large scale. This is the reason the amount of the loan is much more than other two categories and the maximum loan amount is 10 lakh rupees.

You need to note that every governmental financial institution has different rule regarding lending money. The criterion is different and the interest rate is also different.

Main purpose of Mudra loan

The main objective of Mudra loan is to provide loans at affordable interest rates to the people working at small and micro level in the industry.

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The main function of Mudra loan

The Mudra loan scheme plays significant role in small to large scale business. Due to the loan several businessmen are benefitted as the loan somehow is able to provide employment to the people.

  • Mudra loan for shopkeepers and sellers- people who have no farm land or not associated with agriculture can get financial help to start their own business. The scheme will give them up to 50,000 rupees for staring small business.
  • Mudra loan for textile industry- textile industry requires money to because a projectile machine that acts as air jet that costs at around 30,00,000 rupees. And this is the reason the loan amount for the business is up to 5,00,000 rupees so that people can buy it to start their venture into textile industry,
  • Mudra loan for agriculture- nowadays to modern equipment is being used to bring improvement in the agricultural sector and this is the reason the people associated with farming need money. The loan scheme is helping the farmers by providing loan at a lower interest rate so that they can earn money throughout the year.

Mudra Loan Benefits

  • The prime benefit of this loan scheme is that there is no minimum interest rate or there is no maximum interest rate. The interest rate is fixed and it is decided by the bank. The amount of loan is also fixed as it ranges between 50,000 to 10,00,000 rupees.
  • The other good part of the loan is the applicant does not need to produce the property in order to get the loan from the bank. There is no mortgage system as well so availing the loan is much easier.
  • People associated with agriculture will also get benefitted by the scheme. Besides that, the people with start-up business to people with large scale business will get immense benefit from the loan scheme. They can buy pesticides, equipment, fertilizers, etc.
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Eligibility criteria for Mudra Loan

  • Business owners- People who have business are eligible to become the beneficiary of the scheme; be it small or large they are eligible to get loan under the scheme.

  • Shopkeepers- The people who are associated with retail business they often require money to expand the business and this require money. The loan scheme in that case will give money to the people who require expanding the business. So, the shopkeepers of the retail shops are eligible.

  • Small producers- People who are into small scale manufacturing are eligible to get loan from the scheme.

  • Farmers- As the scheme is to give financial assistance to the people associated with agriculture as well; so, they will get money without any mortgage against fixed interest rate.

Types of banks that offers Mudra Loan

As we all know that there are numerous financial institutions that offer loan and they are described below.

  • Micro Finance Institute- In this, people associated in small businesses are given loans by MFIs for their businesses. The MFI scrutinizes all the documents in order to decide whether the applicant is eligible for the Mudra loan.
  • Regional Rural Banks- The central government gives 50% of the capital and the respective state government 15% of the capital to the regional rural banks. Then these banks provide Mudra loans to small entrepreneurs and farmers.
  • Private Banks- The government has also asked many private banks to give loans. These banks can choose any procedure for lending, but the interest rates should be covered under Mudra loan only.
  • Small Finance- These banks mainly give money loans to small entrepreneurs, micro enterprises. For a loan of Rs 50,000 or less, nothing has to be produced in front of the bank. The need for PAN card has now been ignored so, one can get loan without PAN card.
  • Public Sector Banks- There are also some public sector banks, which can provide loans to people under this central government loan scheme. And the loan amount can range from 50,000 to 10,00,000 rupees.

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Required documents for Mudra loans      

The interested candidates need to submit some important documents during application to get the loan under the scheme. The documents are given below.

  • ID proof- As the loan scheme is eligible for the people in India so the interested candidates need to produce ID proof like Aadhar Card, voter ID, telephone bill, passport.
  • Residential proof- According to the rules of the scheme, the interested candidates are asked to submit the residential proof during the time of application for the loan. In the form of residential proof you can submit copy of Aadhaar card, passport, voter ID, telephone bill, bank details etc.
  • Caste certificate- Candidates who belong to backward classes are asked to produce caste certificate in order to prove that you belong to backward class.
  • Passport size photo- The candidates are required to submit 2 passport-sixe photographs at the time of application.

How to apply for Mudra Loan?

In order to apply for the loan under the scheme the candidates need to visit the official website of Mudra Loan Scheme and that is www.mudra.org.in. After visiting you will find the form on the site and you need to download the form and then you need to fill in the form with accurate details. You can take the form to the bank where you have your account.

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Things to know about the loan                                                     

  • The rate of interest and the rules of taking loan may differ for different banks. However, the rate of interest is monitored by the scheme and there is a margin, no bank can disobey the rule.
  • The candidates will have 5 years to repay the loan with interest.
  • The women are also eligible to get loan and the loan will be given by United Women Entrepreneur Scheme. In this case the women need have 50% share of a business to apply for the loan.

What is a currency card ?

There is a card called currency card given by the scheme at the time of loan. The card is also known as Mudra card. The person who got the card will be able to draw money by the card. When someone applies for the loan the bank will open an account on his/her name and the applicant will get the card once the application is accepted by the bank. The bank will transfer the money directly to the beneficiary’s account and the beneficiary can draw the money by using the card whenever they want to.

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Conclusion

After discussing about all the details written above, it can be concluded that the loan is a revolutionary step is taken by the government. The people who have been struggling with financial issues for years and could not expand their business or could not start a small scale business will get the opportunity to establish one. The farmers who have been dealing with loan related atrocities by the private bank or the people who offers money against high interest. With the implementation of the scheme the government will be able to protect the people and reduce the burden of loan from them. It will help to improve the financial condition of the people who are being ignored by the society.

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