PM MUDRA Yojana ? What is it and How it has Helped Establish Many Businesses?

Posted by Naveen Dagla on November 1st, 2018

Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the PM Narendra Modi on 8 April 8 2015 to provide Mudra loans upto Rs. 10 lakh to non-corporate, non-farm small & micro enterprises. Any person can apply for loans in scheduled urban cooperative banks (UCBs), state cooperative banks (SCBs), scheduled commercial banks (public / private banks), regional rural banks (RRBs), small finance banks, micro financial institutions (MFIs) like societies, trusts and non-bank financial institutions (NBFCs). Interested borrower can approach any of the local branch of lending institutions (who provides loans) or can apply online at mudra.org.in or www.mudramitra.in (Mudra loan portal).

Mudra Loan scheme has basically 3 products - Shishu loans, Kishor loans and Tarun loans. These Mudra loans signifies the stages of growth, development, funding needs of the beneficiary micro entrepreneurs and serves as a reference point for next phase of growth. Shishu Mudra loan scheme covers all the loans amounting upto Rs. 50,000 as required by micro / small enterprises. Kishor Mudra loan scheme covers all the loans between Rs. 50,000 and Rs. 5 lakh while Tarun Mudra loan scheme covers the loan amounting upto Rs. 10 lakh. Sanction of assistance from banks or other lending institutions shall be on the basis of eligibility norms of respective lending institution.

All the interested borrowers who needs to avail loans for their new businesses or expanding the previous businesses must have to check the "Document checklist" before applying for Mudra loans at banks or through online mode. Proof of identity like self-attested copy of voter's ID card / driving Licence (DL) / PAN Card / Aadhaar card / passport / photo IDs issued by govt. authority etc. can be submitted to avail Mudra loans. Proof of Residence is also essential to be submitted which can be recent telephone bill / electricity bill / property tax receipt (not older than 2 months) / voter's ID card / Aadhaar Card / passport of individual / proprietor / partners/ bank passbook or latest account statement duly attested by Bank officials / domicile certificate / certificate issued by govt. authority / local panchayat / municipality. 2 copies of recent photograph of the applicant not older than 6 months has to be submitted. Borrower must submit the quotation of machinery and other items to be purchased from the loan amount. Details of machinery including price of machinery, name of supplier and other items to be purchased is to be specified. ID proof & Address of Business enterprise is also to be provided which can be copies of relevant licenses / registration certificates / other documents pertaining to the ownership, identity and address of business unit.

It is important to note that there is no processing fees to avail Mudra loans. The micro enterprises loans upto `10 lakh are collateral free and they can be covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC). The repayment period of Mudra loans under PMMY scheme has been extended upto 5 years. Applicant should not be a defaulter due to previous cases in any Bank / Financial institution. There are no agents or middleman engaged by Micro Units Development and Refinance Agency Ltd. (MUDRA) to avail Mudra Loans. The borrowers are advised to keep away from persons posing as "Agents" of MUDRA.

PMMY was launched with a vision of supporting small entrepreneurs to help Indian economy grow and prosper. Mudra Loan scheme has been extended for a variety of purposes which generates income and employment in manufacturing, services, retail and agri-allied sectors. The primary purpose of Mudra loan scheme is to attain development in an inclusive and sustainable manner by supporting and promoting partner institutions and creating an ecosystem of growth for micro enterprises sector.

However, there are lots of government schemes in India which have benefited people belonging to every category of the society, but MUDRA yojana has been a step ahead in benefiting the Indians. Till 31 March 2018, the data stated that the total number of loans sanctioned PM Mudra Yojana are 4,81,30,593. For the given number of loan takers, the total amount sanctioned stands at 2,53,677.10 crore loans out of which 246437.40 crore have already been disbursed.