The Pradhan Mantri Mudra Yojana (PMMY) has been one of the most effective financial schemes initiated by the Government of India to empower small businesses and entrepreneurs. Introduced in 2015, the scheme provides loans to small and micro firms without collateral through banks, non-bank finance firms, and other lending companies.
If you are a small trader, service provider, artisan, or an aspiring entrepreneur who wants to expand your business by all means without security, then under this scheme, you are eligible to avail of a Mudra loan. In this blog, you will get to know about how I applied online through Internet Usage to avail Mudra loans, what the eligibility criteria is, and what are the advantages of Mudra loans, and the documents I have to submit.
What is Pradhan Mantri Mudra Yojana?
The PMMY scheme offers up to Rs. 10 lakh in loans to non-corporate, non-farm small and micro-enterprises. These loans are referred to as Mudra Loans and are offered in three categories, depending on the business need and the amount of loan required.
- Shishu – Loans of up to ₹ 75,000.
- Kishor – Loans between 50001 and 5 lakhs
- Tarun – In the range of 5 lakh to 10 lakh
The scheme encourages self-employment, assists in formalizing small businesses, and enhances the availability of credit to individuals who fall outside traditional banking criteria.
Advantages of PM Mudra Yojana
- Loans are free of collateral; thus, one does not have to pledge something..
- The interest rates are affordable and competitive, depending on the lending institution itself, which will follow the requirements and guidelines set by the RBI.
- The repayment tenure is flexible, with options going up to 5 years.
- This is leeway in repayment, extending to 5 years.
- The scheme can be well accommodated in most businesses, including retail trade, manufacturing, services, and agriculture-related activities.
- The entities under special categories which attract preference and interest subsidies are women entrepreneurs and SC/ST applicants.
Who Can Apply for a Mudra Loan?
- Any Indian individual running/ intending to run a micro-enterprise or small business can apply.
- The applicant must be engaged in manufacturing, trade, or services, which are income-generating activities.
- The eligible industries are artisans, vendors, repair shops, tailors, beauty parlours, delivery services, food processing units and other such sectors of small-scale manufacturers.
- The borrower should not have failed to service the past loans, and ought to have an excellent credit history.
- The applicant should be between 18 and 65 years old in general.
List of Documents Required to Apply for PMMY
- Give address document, e.g., utility bill, ration card, or Aadhaar card
- Provide the proof of business address and ownership as the case may require
- Include new passport photos
- Include an estimate or af quote of the machinery or equipment to be bought
- Write a small business plan for the loan and anticipated revenue
- Offer bank statements of the previous 6 or 12 months
- Present a caste certificate in case of applying in the SC, ST or OBC category
- Kishor and Tarun loan types to include the income proof or GST registration
How to Apply for Pradhan Mantri Mudra Yojana Online?
Online registration of a Mudra loan is convenient and can be accomplished either on government websites or even on banks’ websites.
- Go to the official site of a participating bank or NBFC (ex, SBI, PNB, Canara Bank, HDFC Bank)
- Go to the Mudra loan or MSME loan page
- Select the Apply Now tab to get a Mudra loan
- Complete the loan application form by entering the personal, business and financial information
- Scan and upload the documents that are required
- Filling out and submitting the form and remembering the reference or application number to keep track of it
- Await the response of the loan officer of the bank after your loan application
- When you qualify, the loan is sanctioned and disbursed either into your account or into the vendor’s account, in the case of equipment or asset purchase.
- In certain instances, there may also be a need to visit the branch to verify the documents or sign the loan agreement.
Apply for Mudra Loan through Udyam Registration
Small businesses must have Udyam Registration so that they can get access to government benefits and schemes such as PMMY
- Check the Udyam registration portal www.udyamregistrations.gov.in
- Register using Aadhaar and PAN to become a micro or a small business enterprise
- After completing the Udyam registration, the businessperson can obtain the certificate, which can be used as one of the identification of the business when applying for a loan.
- Applicants must be in possession of Udyam registration in order to have a speedy processing of Mudra loans availed by lenders
Which Banks provide Mudra Loans?
Mudra loans are provided in PMMY by all banks in the public sector, other than the State Bank of India and most big banks in the private sector as well
- Prominent banks include the State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India, ICICI Bank, HDFC Bank, and Axis Bank.
- Besides the banks, the NBFCs and Micro Finance Institutions (MFIs) also provide Mudra loans, not only in urban but also in rural regions.
- Mudra loans are also offered at select institutions, including Regional Rural Banks and Small Finance Banks.
Conclusion
Micro and small businesses in India now have a new factor in their accessibility to credit due to the Pradhan Mantri Mudra Yojana. Unlike other schemes, such as the Prime Minister’s Rural Housing Loan Scheme or the Ujjwala scheme, which target poorer households, the Mudra loan is designed to support the growth of individuals who run small units, including tailoring businesses, street food cart sales, and online handicraft sales. It is a collateral-free lending scheme with a fast and easy-to-use application procedure, minimal documentation, and gives people with an entrepreneurial spirit control over their financial freedom.
Frequently Asked Questions
1. How much loan is given in Mudra Yojana?
₹10 lakh under Shishu, Kishor and Tarun in the same category.
2. Does the Mudra loan come with a subsidy?
There is no direct subsidy, though interest concessions can be offered to female applicants, SC/ST, or minority applicants.
3. Is an online application possible?
The answer is yes, it can be applied online at first but physical verification might be required.
4. Is registration of a business a necessity?
Preferred on Kishor and Tarun loan rather than on Shishu loan.
5. What is the approval time frame?
Normally 7-15 days work days, bank and document verification.
