1. Blog
  2. >
  3. Policy
  4. >
  5. Govt Schemes
  6. >
  7. What Is Pradhan Mantri...

What Is Pradhan Mantri Mudra Yojana? Mudra Loan Scheme Benefits, Features And Documents Required

Mudra Loan under Pradan Mantri Mudra Yojana

Ever since the liberalization of the Indian economy in the 90s, MSMEs have played a huge role in the development of the county. They have constantly supported the up-gradation of technology, infrastructure development, and triggered the modernization of the country and our society as a whole.

In terms of numbers, MSMEs contribute a staggering 30% to the country’s GDP, and around 45% of the manufacturing output, and approximately 48% of the country’s exports.

Learn more about – What Are MSMEs? Its Definition, Benefits, Registration Process And Classifications

It is due to such huge numbers they’re vital to our economy. However, with the start of the pandemic in early 2020 most MSMEs went into a free fall due to the sudden closure of all avenues through which they did business. To revitalize the economy and businesses the Government of India understood the need to give out loans to businesses. The Pradhan Mantri Mudra Yojana is one such initiative by the Government of India that offers loans to individuals, SMEs, and MSMEs.

Learn more about – How To Get MSME Loan For New Businesses? Explore The Loan Schemes For MSME Businesses

Key Features of Mudra Loan Under Pradhan Mantri Mudra Yojana

Mudra loans can only be availed by individuals, MSMEs, enterprises, or businesses engaged in Manufacturing, Trading, and Services Sectors, only.

Given below are some of the unique features of the Mudra loan –

Interest Rate Varies from bank to bank, depending on business requirements.
Collateral Not required.
Minimum LoanAmount There is no minimum loan amount.
Maximum Loan Amount Up to 10 Lakhs
Repayment Tenure From 3 years to 5 years
Processing Charges No Processing Charges

Products Offered for Businesses Under Pradhan Mantri Mudra Yojana

Under the Pradhan Mantri Mudra Yojana, the loan schemes are classified into three main categories.

Below mentioned are the name and the amount offered under each loan scheme:

Loan Scheme
Eligibility
SHISHU Loan For start-ups and new businesses loans up to Rs. 50,000 can be availed under the Mudra Shishu Loan scheme.
KISHOR Loan For buying equipments, new machinery or raw materials existing enterprises can get loans ranging from Rs. 50,001 to Rs. 5,00,000 under the Kishor Loan Scheme.
TARUN Loan For established businesses and enterprises loans ranging from Rs. 500,001 to Rs. 10,00,000 are available under Tarun Loan Scheme.

Learn more about – What Is Mudra Loan For Women? How To Apply For Mudra Yojana Scheme for Women?

Benefits of Mudra Loan Under PMMY

  • The Mudra loan scheme offers credit facilities to MSMEs engaged in manufacturing, trading and service sector activities. These are currently the main areas of income generation.
  • One of the key benefits is that borrowers are not required to provide security or collateral. Additionally, there are no processing charges on Mudra loans. Furthermore, the loans are covered under the Credit Guarantee Scheme.
  • The credit facilities extended under the PMMY can be used for a variety of purposes. The credit from Mudra loans can be used for term loans, overdraft facilities, or to apply for letters of credit and bank guarantees.
  • Business owners belonging to SC/ST get special concessions on their interest rates if they avail a MUDRA loan.

Learn more about – Benefits Of MSME Registration In India

Free Power Kit

Purpose of Mudra Scheme Under PMMY

The Mudra Scheme under PMMY supports the following income-generating activities –

1. Commercial Vehicle

Mudra finance for machinery and equipment can be used to purchase commercial transport vehicles like tractors, auto-rickshaws, taxis, trollies, tillers, goods transport vehicles, 3-wheelers, e-rickshaws, etc.

Learn more about – What Is A Small Scale Enterprise? Types Of Small Scale Industries (SSI) & Businesses

2. Service Sector Activities

Loans are given for starting businesses like salons, gyms, tailoring shops, medical shops, repair shops, and dry cleaning and photocopying shops, etc.

3. Business Activities for Traders and Shopkeepers

Loans for Setting up shops, service enterprises, trading and business activities, and non-farm income-generating activities are given.

Learn more about – What Is RoDTEP Scheme? Its Benefits, Requirements For Traders & Exporters

4. Agri-allied Activities

Activities related to businesses in agri-clinics and agribusiness centers, food & agro-processing units, poultry farming, pisciculture, beekeeping, sorting, livestock-rearing, grading, aggregation agro industries, diary, fishery, etc. can get loans.

Learn more about – Which Business Comes Under MSME? Explore the Complete List of MSME Businesses

Required Documents for Mudra Loan Under PMMY

  • Self-written business Plan
  • Duly filled application with 2 recent Passport-sized photographs
  • KYC documents of Applicant and Co-applicants- Passport, Voter’s ID card, Aadhar Card, Driving License, PAN card, Utility Bills (Water/Electricity Bills)
  • Proof of belonging to a special category, such as SC, ST, OBC, Minority, etc. (if applicable)
  • Last 6 months’ bank statement
  • Business address and tenure proof, if applicable
  • Any other documents required by the bank

Note – The Mudra loan application form to be filled and submitted is similar to the case of the Shishu and Kishor loan scheme, whereas it is separate for people applying for the Tarun loan scheme.

Related Read About

We are a team of serial entrepreneurs, corporate professionals and business experts, at MSMEx.in

Succeed Online With Highly Effective Business Tips and Tricks

Do you want to scale your business even further than it is today? You are at the right place.

We provide Premium Online Learning for Small to Mid-Sized Businesses.

We are MSMEx, an experienced MSME edtech company with highly qualified staff to help companies grow in their industry and attract more visitors online. Whether you are struggling to gain a competitive edge online or are working on bringing your business online, we are here to assist you.

Learn powerful tips and tricks, customized especially for your business to suit its specific needs. All you need is to create a website to get started. We will help you and your employees learn everything about the internet and how things work to bring your business to the limelight.

How MSMEx Sessions Benefit Businesses?

The sessions of MSMEx are beneficial for businesses of all kinds and scales. We help them leverage the power of the world of the internet and also solve all their queries and doubts. You get expert help, if you are ever stuck with the scalability of your business.

You may be doing great online, but it's always better to learn more about things better. Learning experiences provided by us are enjoyable and beneficial at the same time. Grow your business and soar high without limits.

MSMEx will help you connect with your audience, understand their pain points, and earn more revenue than ever you have expected.

If something is working for your competitor, it doesn't need to work for you as well. You very well know that every business is different, and so are its needs. Hence, we work closely with our clients to know and understand their processes and custom-make solutions that work out for them.

Why Learn From MSMEx Experts?

The lessons we provide to businesses are curated to match their needs, preferences, and operations. With years of experience in creating industry experts, we take pride in the services offered. Learning is a never-ending process, and with the world of the internet evolving each passing day, there is an ocean full of things you need to learn.

Discover what you can do for your business by spending half of what you are doing now. Several companies have opted for the sessions provided by our experts, and they have unlocked more significant benefits that were beyond their imagination.

We teach several aspects of business operations and how a business can do a lot more than what it is doing today. We will help you craft the roadmap of your business' success.

Why is MSMEx Different?

We conduct live sessions for businesses to understand the course content in depth. We also allow them to connect with the lecturers in case of doubts. The pillars of our company conduct interactive sessions to give valuable insights.

We also have e-books for business leaders to unlock the full potential of the world of the internet.

Learn from a team of serial entrepreneurs, business experts, and corporate professionals who have made efforts in their journey to success. We teach business owners and other aspirants the tricks to be focused on growth to drive their business forward.