What is MUDRA Loan?

Many ask, what is a MUDRA loan?

MUDRA stands for Micro Units Development and Refinance Agency Ltd.

It is a Non-Bank Financial Companies (NBFC). It is not a direct lending institution.

MUDRA does a refinance support to Micro Finance Institutions (MFI), NBFC and Banks for lending to Micro units having loan requirement upto Rs.10 Lakhs, under the aegis of Pradhan Mantri Mudra Yojana (PMMY).

Who are all eligible?

Any individual including women, proprietary concern, partnership firm, private limited company or any other entity are eligible applicant under PMMY loans, whose loan requirement is up to Rs.10 lakh.

Any Indian Citizen who has a business plan for a non-farm income generating activity such as manufacturing, processing, trading or service sector whose credit need is up to  10 lakh can approach either a Bank, MFI or NBFC for availing of MUDRA loans under PMMY. The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The lending rates are as per the RBI guidelines issued in this regard from time to time.

What are the types of MUDRA loans?

MUDRA loans are available in three categories. 

   SHISHU : upto  Rs. 50,000

   KISHOR : Rs.   50,000 - Rs.  5,00,000

   TARUN  :  Rs.5,00,000 - Rs.10,00,000

Depending on the nature of business and project requirement you can access finance from one of the intermediaries of MUDRA as per the norms.

What are the requirements?

The requirements are decided by the respective banks, NBFCs based on their internal guidelines and policies.

• Generally IT returns are not insisted for small value loans.
• KYC is mandated
• Loan amount and repayment terms will be decided by the anticipated cash flow from the business activity.

Please note:

MUDRA is a refinancing Institution. MUDRA does not lend directly to the micro entrepreneurs / individuals. Mudra loans under Pradhan Mantri Mudra Yojana (PMMY) can be availed of from nearby branch office of a bank, NBFC, MFIs etc. Borrowers can also now file online application for MUDRA loans on Udyamimitra portal (www.udyamimitra.in). Currently, the site is under construction. Please check back.

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