Pradhan Mantri Mudra Yojana Review, Benefits and Features

Pradhan Mantri Mudra Yojana or Mudra loan is a flagship scheme by the government of India. The PMMY scheme was launched in 2015 with the aim of providing financial support, generating employment and promoting entrepreneurship in the country. MUDRA stands for Micro Units Development and Refinance Agency.

What is the Pradhan Mantri Mudra Yojana?

PM Mudra Yoajana is a scheme launched for providing loans up to 10 lakh (No collateral) to the small and micro enterprises (SMEs). It will provide them the financial support. These loans are given to SMEs engaged in manufacturing, processing, trading or service sector.

Key Features and Benefits of Pradhan Mantri Mudra Yojana

• Easy to apply: The application process for PMMY loans is simple and straightforward.
• No collateral required: PM Mudra yojana provides collateral-free loans. It simply means you do not need to provide any security or collateral to avail of the loan. It makes them accessible to even the smallest businesses.
• Flexible repayment terms: The loan repayment tenure ranges between 3 to 5 years which allows businesses to repay the loans according to their cash flow.
• Government support: The loans under PMMY are backed by the government, which provides some peace of mind to borrowers.
• Interest Rate: The interest rate on Mudra loans is determined by the marginal cost of lending rate or MCLR, which is calculated according to the RBI guidelines.
• The benefits under the scheme has been classified under three categories as ‘SHISHU’, ‘KISHOR’ and ‘TARUN’
  • Shishu: Loans sanctioned under Shishu category is up to Rs. 50,000/-
  • Kishor: Loans sanctioned under Kishore category is from Rs. 50,001 to Rs. 5,00,000/-
  • Tarun: Loans sanctioned under Tarun category is from Rs. 5,00,001 to Rs. 10,00,000/-

Eligibility Criteria of Pradhan Mantri Mudra Yojana

• Age – Minimum age is 18 years and maximum age is 65 years.
• Borrowers – Individuals, Proprietary concern, Partnership Firm, Private Ltd. Company, Public Company.
• All SMEs with non farm enterprises are eligible for this loan.
• All new and existing units for service sector, trading, or manufacturing activities.
• Should be an Indian citizen with valid PAN card.
• The applicant should not be defaulter to any bank or financial institution and should have a satisfactory credit track record.
• Institutions Eligible – Public Sector Banks, Private Sector Banks, Micro Finance Institutions, and Regional Rural Banks

Online Application Process of Pradhan Mantri Mudra Yojana

Follow these steps to apply for PM Mudra yojana online,

• Step 1 – Click on PM Mudra official website. Click on Udyamitra portal and then click on the CTA button Mudra loan “Apply Now”.
• Step 2 – Enter applicant name, email, mobile number and generate OTP.
• Step 3 – After the registration, fill your personal and professional details.
• Step 4 – You can select hand holding agencies if you require any business related help. Otherwise click on CTA “Loan Application Center” and apply now.
• Step 5 – Select the category of loan from Sishu, Kishore and Tarun.
• Step 6 – Fill the business name, business activity and select the industry type.
• Step 7 – Fill the director details, banking/credit facilities existing, credit facilities proposed, future estimates and preferred lander.
• Step 8 – Attach your ID proof, address proof, applicant photo, applicant signature, address of business enterprise.
• Step 9 – Once you submit the application, you will get an application number which you can use for future reference.

Documents required for PM Mudra Yojana

For Sishu Loan,

• ID proof (PAN card, Aadhaar Card, Passport, DL, Voter’s ID Card etc)
• Address proof
• Applicant’s photograph (2 copies)
• Quotation of machinery or other items to be purchased.
• Name of Supplier / details of machinery / price of machinery and / items to be purchased.
• Proof of Identity / Address of the Business Enterprise – Copies of relevant Licences / Registration Certificates / Other Documents pertaining to the ownership, identity of address of business unit, if any
• Proof of category like SC / ST / OBC / Minority etc.

For Kishore and Tarun Loan,

• ID proof (PAN card, Aadhaar Card, Passport, DL, Voter’s ID Card etc)
• Address proof Proof of SC/ST/OBC/Minority.
• Proof of Identity/Address of the Business Enterprise
• Statement of accounts (for the last six months), from the existing banker, if any.
• Last two years balance sheets of the units along with income tax/sales tax return etc. (Applicable for all cases from Rs.2 Lacs and above).
• Projected balance sheets for one year in case of working capital limits and for the period of the loan in case of term loan (Applicable for all cases from Rs.2 Lacs and above).
  • Sales achieved during the current financial year up to the date of submission of application.
• Project report (for the proposed project) containing details of technical & economic viability.
• Memorandum and articles of association of the company/Partnership Deed of Partners etc.
• In absence of third party guarantee, Asset & Liability statement from the borrower including Directors & Partners may be sought to know the net-worth.

Pradhan Mantri Mudra Yojana FAQs

This covers all the points on Pradhan Mantri Mudra Yojana (PMMY) . An amazing scheme for small businesses. If you have any suggestions or experience, please write in the comment box and will get back to you.