India is home to a significant number of medium, micro, small, and big businesses. More than ever, this percentage is constantly increasing, which could help the country’s economy a lot if it works out. On the other hand, many of these come to a halt because they don’t have enough money. Additionally, the Indian government has come up with a plan known as Pradhan Mantri Mudra Yojana to help people move smoothly with the help of money. Further, under this plan, businesses can get money in terms of a mudra loan and achieve their career goals.
What is Mudra Loan?
The Pradhan Mantri Yojana scheme was only meant to help small businesses in India grow and reach their peak. Further, on April 8, 2015, this program was officially launched. It is meant to help fund several businesses like this. There is an organization called Mudra, which stands for Micro Units Development and Refine Agency. Furthermore, Mudra helps businesses from both the profit and non-profit industries get money. Those who qualify for a mudra loan can get up to Rs. 10 lakhs of help from the government with their money needs. In the ideal world, these businesses should be able to get this loan.
- Small finance banks
- RRBs (Railway recruitment boards)
- Commercial banks
- NBFCs (Non-banking financial corporations)
- MFIs (Microfinance institutions)
What is the Mudra loan card?
This card is made to help people get their money back quickly after they get a loan. Because it functions like a credit card, the borrower has a lot of options. They can swipe the card as needed to get the money. Further, people can take money out of this card as many times as they want because it has an overdraft loan. Finally, it also helps to keep track of withdrawals electronically to avoid any mistakes.
Features of the Mudra Loan
The mudra loan has the following features that make it stand out from other government programs:
- The working capital needs of the company that takes out this loan can be met with the money from this loan.
- Most of the time, it is aimed at businesses that make, trade or provide services.
- In addition, the pm mudra loan can be used by both businesses that already exist and new businesses & startups.
- This is how long the length of the mudra loan can be: 3 years to 5 years, terms of how long it is agreed upon when the loan is made.
- Further, it’s easy for anyone to apply for a loan on the mudra website or the mudra app because they have enough tools.
- Furthermore, enterprises can use the money they get from this loan to buy equipment, buy machinery, expand their business, restructure their business, hire good employees, get more working capital, and many other things.
- Also, it doesn’t need any collateral or extra security from a third party.
Benefits of Mudra Loan
Many people like the Mudra loan scheme because it has a lot of benefits, some of which are listed below.
- Further, if you want to use kind of the mudra schemes, there is no collateral or third-party security you need to give.
- The interest rate on a Mudra loan is very low and doesn’t go above 1% a month.
- Moreover, with a Mudra loan card, you may easily withdraw the sanctioned amount without having to visit the bank physically.
Why are Mudra Loans so Popular?
MUDRA loans have a low-interest rate in comparison to other forms of loans, which contributes to their popularity.
Additionally, you won’t have to pay anything to use these loans for your business because they are provided with a subsidy. Further, to make things even better, you can utilize the cash for anything you want, like to pay off debts or pay your suppliers. Additionally, there is no prepayment penalty, which implies that if you want to return early, you will incur no interest. You can also check some personal loan options
Purpose of Mudra loan
In addition, Mudra loans are granted for a range of objectives that result in the development of revenue and employment. Further, you can use these loans mostly for the following purposes:
- Vendors, merchants, shopkeepers, and other service-based enterprises are eligible to qualify for business loans.
- Loan for working capital using MUDRA Cards
- Finance for Micro Units’ Equipment
- Loans for transport vehicles — for business purposes only
- Loans for non-farm agribusiness businesses, such as pisciculture.
- Apiculture, poultry rearing, and so on.
- Tractors, tillers, and two-wheelers used only for business purposes.
Mudra Loan Limits and Interest Rates
Additionally, interest rates and Loan limits differ according to the financing options available under this plan to accommodate the phase of growth of the firm receiving the loan. Further, MUDRA loans are subject to the RBI-defined MCLR (Marginal Cost of Lending Rate), which is broken down as follows. If you are looking for an instant salary loan then you can try Roopya.
Up to a maximum of Rs.50000:
Small Enterprises- Bank Load + (MCLR + SP)
Micro Enterprises- MCLR + SP
Greater than Rs.50000 but less than Rs.2 lakhs:
Small Enterprises- Bank Load + (MCLR + SP)
Micro Enterprises- Bank Load + (MCLR + SP)
Over Rs.2 lakhs but less than Rs.10 lakhs:
Micro Enterprises- Bank Load + (MCLR + SP)
Small Enterprises- Bank Load + (MCLR + SP)
Mudra Loan Eligibility Criteria
MSMEs in rural and urban regions of India are eligible to apply for the Mudra loan if they satisfy the following criteria:
| Eligibility status | Criteria |
| Age Limit | 18 years – 65 years |
| Loan Amount:
Tarun Yojana – Kishor Yojana – Shishu Yojana – |
Rs. Up to 1 Lakh Rs. 50,000 – Rs. 1,00,000 Up to Rs. 50,000
|
| Tenure of Loan | 3 years – 5 years |
| Company Status:
Tarun and Kishor – Shishu –
|
Expansion of the existing company New company commencement |
| Type of Industry
|
Individual occupied in agriculture, small-scale manufacturer, fruit and vegetable vendor, store owner, Craftsmen.
|
Conclusion
The MUDRA scheme can help a lot of people to start their businesses. Also, there are many other benefits. For instance, it implies that individuals will no longer be reliant on others for their income and will be free to establish any form of business they like. Additionally, it may enhance productivity by enabling a more significant number of individuals to collaborate on larger goals. Therefore, if you live in India and want a loan, you may choose to pursue a MUDRA loan.