The Pradhan Mantri Mudra Yojana (PMMY) is the latest hassle-free loan scheme for both small and medium entrepreneurs that supported by Govt. of India. The PMMY scheme was started on April 8th, 2015 by PM Narendra Modi. The Motto of this mudra scheme is “Funding to the Unfunded”, and it will provide loan facilities to all small and Micro-entrepreneurs that is engaged in non-farm activities like household and non-household manufacturing, handicrafts, processing, repairs, construction, mining and quarrying, transport, trade, communication, community and personal services, etc.

In rural areas. A major part of the beneficiaries that comes under a non-farm section like shopkeepers, fruits/vegetable vendors, truck/ tempo, foodservice units, repair shops, machinery, manufacturing units, food processors and small industries in urban areas.  

In another form, the PMMY Loan facilities will be provided to non-financing companies by the small banks, co-operative corporations & banks, and regional rural banks to manufacturing,  trading & servicing micro units & small businesses. Here in this article, we will discuss everything about mudra loan details.

What is Mudra?

The Mudra stands for “Micro-units Development and Refinance Agency Ltd” is a public sector financial institution in India. It provides loans at the low interest rates under the Pradhan Mantri Mudra Yojana. We have checked the various website and found that mudra loan interest rate is ranging from 9.65% to 11.75%. You can check the same while applying for your mudra loan scheme with your bank.

There is Three scheme offering under the pradhanmantri mudra yojna: The Shishu Loan, Kishor Loan, and Tarun loan. Check more details about mudra loan eligibility from below.

  1. The Shishu Loan:

Under the Pradhan Mantri Mudra Yojana Shishu loan section, every beneficiary can apply for the loan up to INR 50,000/- maximum.

In this section, the beneficiary can use the amount of loan for any fund based working capital and any business except the farming & agriculture section.

  1. The Kishor Loan:

In this section, the beneficiary can able to apply for the loan amount between INR 50,000/- to INR 5,00,000/- Maximum.

The Kishor loan can be utilized to the both as Term Loan and as Working Capital for any business except farming and agriculture section.

  1. The Tarun Loan:

If the beneficiary’s fund requirement is an INR 5,00,000/- or above, then the beneficiary can apply for loan amount between INR 5,00,000/- to INR 10,00,000/- maximum.

In this section, the loan amount can also be utilized as Term Loan and as Working Capital for all kinds of business except farming & agriculture section.

What is Mudra Card?

The Mudra Card is a Rupay based debit card that allows the beneficiary to avail the Loan amount in a hassle free and flexible way. The Mudra Card can be used for the drawing cash from the ATM or also for Business Correspondent to make the purchases using the POS (Point of Sale) machine.

mudra loan
Image credit: business-standard.com

With the Mudra Card, the beneficiary can also withdraw Cash from the ATM counters. The Mudra Card can also be used as a credit card to avail the Over Drafting facility.

What is the SBI PMMY Loan Processing Charge?

You don’t have to pay anything as a Processing Charge if you want to apply for the loan under the “Shishu” section for INR 50,000/-.

If you want to apply for the loan amount between the 50,000 to 10,00,000, then you will have to pay 0.50% Processing charge of the loan amount. (Also, service Tax as per applicable rates to be recovered ) and other charges as applicable.

What are SBI PMMY Loan Interest rates?

The interest rates of the loan amount to be charged as per the regulation and policy that decided by the bank. However, the interest rate for the amount of the loan will be charged at reasonable rates.

What kind of borrowers are covered under CGTMSE Guarantee?

All Types of retail traders are not eligible to be covered under the CGTMSE guarantee scheme.

Under the Pradhan Mantri Mudra Yojana Scheme, all the borrowers that belong to such activity as Manufacturing and services are covered under the CGTMSE guarantee scheme.

What is repayment period for the SBI PMMY Loan?

If the borrower has applied for the loan as a Working Capital, then the borrower have to repay the loan amount on demand of the bank.

If the borrower has applied for the loan as a “Term Loan,” then the borrower have to repay the loan amount between 3 to 5 years with the moratorium of up to 6 months.
Here, we have listed below few of the activities that can be covered under the Pradhan Mantri Mudra Yojana loan:

  1. Loans for Traders and Shopkeepers

With the Pradhan Mantri Mudra Yojana, all type of Shopkeepers and Traders can apply for the loan for running their Business, Shops, Trading, & service enterprises and for any other business except farm & agriculture section.

  1. Textile Sector

The Textile Products Sector such as Handloom, khadi, power loom and chikan work, zari-zardozi work, hand work, apparel design, knitting and cotton ginning, traditional embroidery and computerized embroidery, stitching.

Also, another non-textile sector such as vehicle accessories, furnishing accessories all are covered under the Textile Products Sector and also able to apply for the loan under PMMY Scheme.

  1. Food Sector

The All types of the food industry, like Sweet shops, Small Food Stalls, canteen services, cold storages, Ice-cream Making Units, Bread Making Units, Biscuit Making Units, Papad Making Units, Achaar Making Units, and other Food Making Units are covered under the Food Sector that can also apply for the PMMY Loan.

  1. Transport Services

The All types of transport vehicles for personal and Goods Transport such as 3-wheelers Rickshaw, E-rickshaw, Small Goods Transport Vehicle, Passenger cars and taxis all are the covered under the transportation services.

What kind of documents have to be submitted for PMMY Loan?

Required documents for Shishu Loan Scheme

  • Proof of identity: Self-certified copy of Voter’s ID card/ Driving License/ PAN Card/ Aadhaar Card/ Passport/ Photo ID that issued by Govt. authority.
  • Proof of Residence: Recent telephone bill, electricity bill, property tax receipt, Voter’s ID Card, Aadhaar Card, Passport/ Proprietor/Partners, Certificate issued by Govt. Authority/ Local Panchayat/ Municipality
  • Applicant’s Recent Photograph-2 copies (not older than six months)
  • Proof of SC/ ST/ OBC/ Minority(if applicable)
  • Proof of Identity/ Address of the Business Enterprise(if available)
  • Statement of Account from the existing Banker for the last six months(if any)
  • Quotation of Machinery/ other items to be purchased

Requires documents for Kishore and Tarun Loan Schemes

  • Proof of Identity: Self-certified of Voter’s ID card/ Driving License/ PAN Card/ Aadhaar Card/ Passport/ and Photo Id that issued by Govt. authority
  • Proof of Residence: Recent telephone bill, electricity bill, property tax receipt( But not older than two months), Voter’s ID Card, Aadhaar Card, Passport and Certificate issued by Govt. Authority/ Local Panchayat/ Municipality etc.
  • Proof of SC/ ST/ OBC/ Minority(if applicable)
  • Proof of Identity/ Address of the Business Enterprise – Copies of relevant Licenses/ Registration Certificates/ lease or Rent Agreement/ Other Documents about the ownership, identity of the address of business unit / Udyog Aadhaar Card.
  • Statement of Account from the existing Banker for the last six months(if any)
  • last two years unaudited balance sheets of the current units along with income tax/ sales tax returns etc. (Applicable for loans of INR 2 lacs and above)
  • Projected balance sheets of start-ups/existing units for one year in the case of working capital limits and the period of the loan in case of term loan (Applicable for loans of INR 2 lacs and above)
  • Sales achieved during the current financial year up to the date of submission of application (in the case of existing units)
  • Proforma Invoices/ Quotations for the assets to be purchased and estimates for the civil works(if any to be undertaken) Aspect of technical feasibility and economic viability may be discussed with the borrower if felt necessary.
  • Asset & Liability statement of the borrower including Directors  & Partners.
  • Photos (2 copies) of Applicant/ Proprietor/ Partners/ Directors.(not older than six months)

How to Apply for the PMMY Loan Scheme?

To apply for the PMMY Loan Scheme, first of all, you have to visit the Mudra Official website to download the application form of the Loan Scheme, then submit the filled application form along with the all mentioned documents to the nearest SBI bank.

More information on Mudra Yojana

Read entire article? still, question? Please share your questions in the comments below. Alternatively, you can also contact regional nodal officers at Mudra Bank from below contact information.

SIDBI, Ground floor,
Videocon tower, Jhandewalan Extension,
E-1, Rani Jhansi Road,
New Delhi-110055
India

Official website: mudra.org.in
Contact email: [email protected]