The Union Government extends collateral-free Mudra loans to help finance micro, small or medium enterprises. This financial aid can help you start, enhance or expand your business based on your goals. To know various Mudra loan details, such as what it entails, its eligibility and the documents required, read on.
A Mudra loan provides funds for starting and growing businesses under the Pradhan Mantri Mudra Yojana from the non-corporate sector. The full form of Mudra is Micro Units Development and Refinance Agency Ltd. This scheme works in conjunction with several lenders to help you get funds easily.
Per the Pradhan Mantri Mudra Yojana (PMMY) provisions, MUDRA has created various categories of loans, which are:
These categories are based on the growth stage and financial needs of the entrepreneur or micro unit. The government’s priority is to offer Shishu loans to encourage small-scale proprietors in India’s rural and urban areas.
You can avail of this loan through qualified member lending institutions, including:
Some general criteria that help you qualify for this loan are:
Age:
Eligible Entities:
Other Criteria:
Also Read: How to Grow Business with Fibe’s Personal Loan
The documents you need for a Mudra loan depend on the type of loan you select. Check the tables below:
| Document Type | Details |
|---|---|
| Identity Proof | A self-attested copy of any one of the following:Voter’s ID CardAadhaar CardGovernment Photo IDPAN CardPassportDriving Licence |
| Address Proof | A self-attested copy of any one of the following:Telephone bill Property tax receipt (not older than 2 months) Passbook or account statements attested by bank officialsAadhaar Card Passport Electricity bill Domicile Certificate Voter’s ID CardCertificate issued by a Government Authority/Local Panchayat/Municipality |
| Applicant’s Photograph | 2 copies of recent colour photographs – not older than 6 months |
| Quotation of Machinery/Items | Quotation for machinery/items to be purchased, including the following details:Supplier nameDetails Price |
| Proof of Business Identity/Address | A copy of the following as per relevance:Relevant LicencesRegistration Certificates Other documents related to business ownership and address |
| Document Type | Details |
|---|---|
| Identity Proof | A self-attested copy of any one of the following:Passport Aadhaar CardDriving LicensePAN Card Voter’s ID card |
| Address Proof | A copy of the following documents:Recent telephone billElectricity bill Property tax receipt – not older than 2 monthsVoter’s ID card Aadhaar Card and Passport of Proprietor/Partners/Directors |
| Photograph of Applicant | 2 copies of recent colour photograph – not older than 6 months |
| Proof of Business Identity/Address | Copies of the following as per relevance:LicensesRegistration certificatesOther documents related to business ownership and address |
| Bank/Financial Institution Default Status | Applicant should not be a defaulter in any bank or financial institution |
| Statement of Accounts | Last 6 months’ statement of accounts from the existing banker, if any |
| Financial Statements | Last two years’ balance sheets, income tax/sales tax returns – for cases from ₹2 lakhs and above |
| Projected Financials | Projected balance sheets for one year (working capital) or for the loan period (term loan) – for cases from ₹2 lakhs and above |
| Sales Achievement | Sales achieved during the current financial year up to the date of application submission |
| Project Report | Report on the proposed project, including technical and economic viability |
| Company Documents | Memorandum and Articles of Association of the company / Partnership Deed of Partners |
| Asset & Liability Statement | Statement from the borrower, including Directors & Partners, if no third-party guarantee is provided |
You can get this loan through two means. These are:
You can apply for this loan offline by following these steps:
You can check this list online or ask your existing bank to guide you.
Fill in the form with the correct information and review it before you submit.
Submit the required documents that the lending institution may ask for.
The lending institution will conduct various checks to verify your application. If all checks are satisfactory, it will approve your loan.
After your loan is approved, the lender will disburse the funds into your bank account.
You can get an e-Mudra loan by following these steps:
At every stage of business, you require funds to sustain operations, expand and diversify. If you need to supplement business financing or do not qualify for a Mudra loan, you can get the needed funds from Fibe.
Our Instant Cash Loan offers up to ₹5 lakhs and helps you get competitive interest rates by submitting minimal paperwork. A 100% digital process and instant approval help you cater to urgent needs with ease. Zero preclosure charges and a 36-month repayment timeline help you borrow and repay comfortably. Register on our website or download the Fibe App to acquire the funds you need to start or grow your business.
Interest rates for these loans are deregulated. Each associated lending institution charges its own interest rates in adherence to RBI guidelines. Usually, the rates on these loans are nominal.
The Tarun Mudra loan under the PMMY offers up to ₹10 lakhs for small businesses. You can apply for it from various financial institutions.
A Mudra loan offers many benefits. Some of these are:
Numerous public sector banks, private sector banks, state-operated co-operative banks, rural banks from the regional sector and small finance banks provide Mudra loans. Compare the fees, interest rates and requirements of each bank and choose the one that can best match your needs.
For amounts up to ₹50,000, there is usually no processing fee applicable on a Mudra loan. For amounts that are more than that, lenders may charge a processing fee along with GST.
