PM Mudra Loan Yojana – Application Form – Eligibility – Interest Rate

By | February 19, 2017
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Pradhan Mantri Mudra Loan Yojana – Download Application Form And Apply Online

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Pradhan Mantri Bank Loan Facility (PMMY)

Recently our government has launched many schemes to help the needy. One of the schemes is PARDHAN MANTRI MUDRA YOJANA. The aim of this scheme is to provide financial assistance (by providing Loans at reasonable interest rates). Depending on the size of business Loans are being offered accordingly. Under this scheme, LOANs up to 10 Lakh are being provided. The MUDRA LOANs have been classified as – SHISHU LOAN, KISHORE LOAN & TARUN LOAN.

To run smoothly, all businesses should be financially strong. Established businessmen manage all the financial issues by themselves. However, the start ups or entrepreneurs need help. If the help comes from the government, that is a good thing. Indian Government has come up with a Loan scheme that has been named as PARDHAN MANTRI MUDRA YOJANA (PMMY).

How To Apply For Bank Loan Facility

The applicant for MUDRA LOAN should approach any of those banks that are listed by the scheme as Loan providers. Then, provide the bank with complete business details of your business, using which the bank would categories your business into one of three categories specified by the scheme.

SHISHU (Child) category – As the name suggests, this category is for the Start ups. All those businesses that have been just started and looking for Loan will fall in this category. A Loan Cover of Rs. 50,000 will be given to all micro units falling in this Category. Interest Rate for SHISHU Category is in the range of 10 to 12 %

KISHORE Category – This one is for those who have started their business but it has been established yet.  A Loan cover from Rs. 50,000 to 5 Lakhs will be given to units falling into this category. Interest rate in KISHORE category is in the range 14 to 17% percent

TARUN Category – All small business which have been set up and established will fall into this category. There may be some financial requirements for the betterment of business. That’s why all small business or units falling into this category will be eligible for a Loan Cover of up to Rs. 10 Lakh. Interest rate in the TARUN category starts from 16 %

The Loan under this scheme is a collateral free Loan; hence it is easy to obtain with a good credit history of the business.

Documents required attaining MUDRA LOAN

  1. Identity proof, residence proof and business address or establishment Proof.
  2. Balance sheets, income tax returns of last three years
  3. A written proposal or the partnership deed of partners etc.
  4. A rental agreement, if the business premises are on rent.
  5. Latest assets and liabilities statement along with the tax return of promoters and guarantors.
  6. Projected balance sheet of the coming two years if having working capital limit and projected balance sheet for the period of term Loan if having Loan, for cases involving Rs. 2 lakh and above.

Responsibilities of MUDRA Bank

  1. Preparing and Launching the Policy Guidelines.
  2. Registration and Regulation of MFI (Micro Finance Institution) Entities.
  3. Running a Credit Guarantee Scheme
  4. Creating a Good Architecture for serving Micro business by providing them Loan (Financial Assistance)

Eligibility Criteria for Participating Banks and Financial companies

  1. Scheduled commercial banks

All scheduled commercial banks in public and private sector with 3 years of continuous profit track record, net NPAs not exceeding 3 %, minimum net worth of Rs. 100 cr. and not less than 9% CRAR are eligible to lend Loan.

  1. Regional Rural banks

All restricted RRBs having net NPA within 3%, having profitable operations and not carving any accumulated losses and CRAR>9% are eligible to lend Loan.

MFI, small business companies are also eligible if they fulfill the requirement.

Interest rate of MUDRA LOAN

  1. If Loan availed under MUDRA SHISHU up to Rs. 50,000 then normal rates around 10%-12% interests are charged.
  2. If Loan availed under MUDRA KISHORE up to 5, 00,000 which comes under unsecured Loans so interest rates would be in between 14%-17%.
  3. If Loan availed under MUDRA TARUN with the margin of 5l to 10l, interest will be high end starts from 16% and varies from bank to bank.

Benefits of attaining MUDRA LOAN

  1. Using MUDRA LOAN one can able be attain finance ranges from 50,000 to 10, 00,000
  2. Without any processing fee, one can avail Loan without any bother.
  3. MUDRA LOAN mainly focuses on small business instead of concentrating on large scale business.
  4. Interest rates of MUDRA LOAN are pretty affordable and low when compared with other normal banker’s interest rates.

Disadvantages of MUDRA LOAN

1.The Problem mainly focus on our, since our country growth still mainly depends upon the bigger scale companies concentrating on funding micro or small  firm will be a difficult process  also several commercial banks are hesitating to lend finance support to small scale business especially from rural areas.

2. Financing agencies like NABARD, SIDBI which are similar to MUDRA bank are not functioning good which cause biggest worries to newly started MUDRA LOANs.

3. MUDRA bank promotes shadow banking often refers to the bank functioning with certain boundaries which is not good.

PARDHAN MANTRI MUDRA BANK YOJANA

PMMY is implemented as envisioned; there will be series of positive impacts on Indian economy.

  1. Increased entrepreneurial success will immediately boost the GDP (Gross Domestic Product) of demographic region where the business are located.
  2. Increased business success will mean increased employment and increase Income; which in turn translates into increased spending.
  3. More spending power in hand of general populace means increased demand for goods and services.
  4. Increased demand in return stimulates the manufacturing segment of the economy and supply of goods and services increase to meet the increased demand.

This creates a circle where in business units and end users all benefits in form of increased income and better lifestyle. Increased income in turn allows access to better health care facilities, better education, better nutrition and more. As these aspects of life improve, work efficiency improves.

So, if the PARDHAN MANTRI MUDRA BANK YOJANA succeeds, the whole economy will grow over years and help India emerge as one of the most powerful economies in world.

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