The Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency) Yojana, also known as the PMMY, was launched by the Government of India on 8 April 2015. This scheme aims to make loans more accessible to small businesses and entrepreneurs, staying true to its slogan- ‘Funding the Unfunded.’
Under this, businesses can get a loan of up to Rs 10 Lakh. If you’re curious about this loan and don’t know how to apply for the loan, look no further.
Here, we discuss everything you need to know about Mudra loan: how to apply, the documents required, its various schemes, and, most importantly, how to easily track the status of your loan.
Mudra Loan: How to Apply?
There are two ways that loan seekers can apply for a loan under the PPMY: online apply and offline. We discuss both these modes of Mudra loan application here.
PM Mudra Yojana Loan: Apply Online
You can apply for the Mudra loan without stepping out of the comfort of your home. For Mudra loan yojana online apply, follow the steps below:
Step 1: Download the loan application form by visiting the official website of the eligible financial institution that offers Mudra loans as per RBI guidelines.
Step 2: Complete the downloaded application form with all required details. Be sure to enter correct information. Attach all relevant documents as well. We’ll discuss the list of required documents further in the article.
Step 3: Submit the duly filled application form online on the website of the financial institution from where you downloaded the application form. Once submitted, you will receive a reference ID or number.
Step 4: The financial institution’s representative will contact you to take the process forward. Be sure to keep your reference ID at hand during the formalities.
Step 5: Once your application form and attached documents are processed and verified by the financial institution, the loan amount will be disbursed directly into your account.
PM Mudra Yojana Loan: Apply Offline
If you want to apply for the Mudra loan offline, here are the steps to follow:
Step 1: Visit the PMMY-authorised financial institution’s nearest branch.
Step 2: Complete the application form and attach all necessary documents before submitting it to the financial institution. We’ll be discussing the list of documents required further in the article.
Step 3: Complete all other formalities directed by the financial institution.
Step 4: Once the application form and the documents are processed and verified by the financial institution, the loan amount will be disbursed directly into your account.
And that’s it. Applying for your Mudra loan is easy and straightforward, and it is even more convenient if you decide to apply online.
Documents Required for Mudra Loan
Along with the application form, you will need to submit certain documents. Here’s a concise list to help you prepare beforehand and ensure the entire application process is smooth.
1. KYC documents such as Passport, Voter ID card, Driving License, Aadhaar card, Utility Bills (water or electricity), and PAN card
2. Documents in case the applicant belongs to SC/ST/any other special category
3. Proof of current address
4. Proof of income
5. Bank statement for the last six months
6. Business establishment certificate
7. Proof of continuity of business
8. Any other documents required by the financial institution
PM Mudra Yojana Loan Schemes
Under the PPMY scheme, loan seekers can apply for collateral-free business and working capital loans of up to Rs 10 Lakh with a repayment tenure of up to five years. Individuals, self-employed professionals, MSMEs, and other business entities are eligible for this loan.
Further, financial institutions charge nominal processing and foreclosure charges on these loans.
The Mudra Yojana loans are classified into three loan schemes. These are as follows:
1. Shishu Loan Scheme:
Applicants can apply for a loan amount of up to Rs 50,000. These are ideal for start-ups and new businesses.
2. Kishore Loan Scheme:
Applicants can apply for a loan amount between Rs 50,001 and Rs 5,00,000. This is ideal for meeting expenses such as purchasing equipment, machinery, and raw materials and for expenses arising from business expansion.
3. Tarun Loan Scheme:
Applicants can apply for a loan amount between Rs 5,00,001 and Rs 10,00,000. This is ideal for established businesses and enterprises.
Applicants can choose to apply for a Mudra Yojana loan under any of the above three schemes depending on the loan amount required and repayment capacity.
Who Offers PM Mudra Yojana Loans?
Public, private and regional rural financial institutions are eligible to provide Mudra loans. This is to ensure that these loans are easily accessible to all. Here is a list of financial institutions that offer Mudra loans:
1. Non-Banking Financial Companies (NBFCs)
2. Public and private financial institutions
3. Regional Rural Banks (RRBs)
4. Small Finance Banks (SFBs)
5. Micro Finance Institutions (MFIs)
The financial institution must meet the following criteria to be able to offer loans under the PMMY scheme:
1. It must have generated profits in the last two years.
2. In case it is a public, private or regional rural financial institution, its net performing assets must be greater than 15%, 10%, and 6%, respectively.
3. The net worth must be above Rs 250 Crore in case it’s a private or public financial institution. In the case of a rural bank, the net worth must be above Rs 50 Crore.
How Can you Check your Loan’s Status?
The method to check your Mudra loan application status differs with financial institution. Several financial institutions allow applicants to check the status online, without requiring to visit their branch. It’s best to visit your chosen financial institution’s website for the same.
Alternatively, you can also verify your Mudra loan status through SBI e-Mudra by dialling 1800-11-2211 (toll-free). Be sure to keep your reference ID or number at hand for a smooth process.
Final Thoughts
Businesses looking to raise funds can follow the steps above for PM Mudra loan’s online application and offline application process. Further, once you submit the application, you can check the status of your loan through the ways mentioned above.
However, if you’re looking for alternate financing or require loans greater than 10 Lakhs, consider applying for a business loan with Tata Capital. With attractive interest rates, easy eligibility criteria, minimal documentation, and quick approvals, you can give your business the wings it deserves in no time. What’s more, you can apply for your Tata Capital business loan right from the comfort of your home!
To learn more, visit the Tata Capital website or download the Tata Capital App now!
24 April 2024
6 mins read
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