Mudra Bank (Micro Units Development and Refinance Agency Bank) is a financial institution run by the Government of India. It facilitates providing loans to small financing institutions and non-banking financial institutions at low-interest rates. They further provide credit to the Micro, Small, and Medium Enterprises (MSMEs) in the manufacturing, trading, allied agriculture, and services sector. Mudra Scheme was launched in the year 2015. One can fill their Mudra Loan Application through an easy and efficient online medium.

Purpose of Mudra

The purpose of Mudra is to fund the micro, small and medium enterprises. This enables them to generate income and employment. The loan amount provides them a necessary cushion to take their business forward.

The interest rates on the Mudra loans are lesser than the regular banks. Hence it proves to be favorable to the beneficiaries. Loan amounts range from INR 50,000 to INR 10 Lacs.

There are 3 categories that the businesses fall into under the Mudra scheme. They are the following

  • ‘Shishu’
  • ‘Kishor’
  • ‘Tarun’

‘Shishu’ stage indicates that the business is in the teething process and is newly set up. The amount of loan it can avail is a maximum of INR 50,000.

‘Kishor’ stage is for those businesses that are already existent. They require loans to expand their business further. The number of loans they can avail is within the range of INR 50,000 to INR 5 Lac.

‘Tarun’ stage means that the business is fully established but there is still further scope of progress. The loans these businesses can avail are up to the amount of INR 10 Lac.

The loans provided under the Mudra scheme are mainly for the following

  • Business loans to traders, manufacturers, vendors, shopkeepers, and those in the service sector.
  • Financial loans for micro-units.
  • Loans for purchase of transport vehicles.
  • Credit to the Agricultural and Food products sector.
  • Loans for service activities such as beauty parlor, gymnasium, tailor shops, among others.

Edibility for Mudra Loans

  • All ‘Non-Farm Enterprises’ can apply.
  • The enterprise should either be micro, small, or medium.
  • It should be practicing an income-generating activity.
  • The credit requirement should be below the amount of INR 10 Lacs.
  • The sectors availing loans should be either manufacturing, trading, services, or allied agriculture.

Documents required along with the Mudra Loan Application

The beneficiaries need to produce certain documents for the verification process to avail of loans. Hence, these documents are necessary to establish the identity of the applicant in the concerned Bank. The following documents are necessary depending upon the purpose of the loans.

Loans for vehicles

  • Photo Identity Proof
    • Voter ID Card
    • PAN Card
    • Passport
    • Driving License
  • Residential Proof
    • Property Tax Receipt
    • Electricity Bill
    • Business address proof
    • Telephone Bill
  • Income Proof
  • 2 Passport size color photographs
  • Bank Statement of the past 6 months
  • Vehicle Loan Application Form

Loans for Business installment

  • BIL Application Form
  • Photo Identity Proof
  • Residential Proof
  • Establishment Proof
  • Bank Statement of the past 6 months
  • Proof of continuity of business
  • Ownership of business proof
  • Proof of qualification
  • Trade References

Rural Business Credit and Business Loans group

  • BIL Application Form
  • Photo Identity Proof
  • Residential Proof
  • Ownership of business proof
  • Bank Statement of the past 12 months
  • Business vintage proof
  • Income Tax Returns for the past 2 years

Mudra Loan Application Process

  • Fill the Mudra Loan Application form. The form is available at Pradhan Mantri Yojana.
  • Download the Application Form and then fill the details.

Mudra Loan Application

Mudra Loan Application

Mudra Loan Application

Mudra Loan Application

  • Take a print out of the Loan Application form and fill it with the appropriate information.
  • Further, visit your nearest public or a private sector bank.
  • Then, you have to present your business idea to the bank representative.
  • Establish to the bank whether your business is in the stage of ‘Shishu’, ‘Kishor’, or ‘Tarun’.
  • Submit the Loan Application Form along with the attested copies of the necessary documents to the Bank.
  • Fulfill all the Bank formalities to complete the process.
  • Consequently, you shall receive the specific loan amount.

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Related Topic: Mudra Loans