Mudra Yojana - Collateral Free Business Loan for Small Business

What is MUDRA?

The first thing to understand here is, MUDRA is not a bank. It is only a refinancing body. You get the loan from your bank. Mudra finances your bank for this loan.

Tip: Don’t look out for MUDRA office. Approach your bank for this loan.

Who can get the loan under Mudra Yojana?

1. New & Existing both type of businesses can get a loan under MUDRA Yojana.

2. The scheme provides loans only to micro and small units. Big businesses can’t get this loan.

3. Age : 18-65 years

4. Defaulters of any banks are not allowed

5. Proprietorship, Partnership, Registered Company, Vendors, Traders, Shopkeepers - All are eligible for this loan.

6. Manufacturing, Service, Retail - All business types are eligible.

Schemes Under Mudra Yojana:

1. Shishu Yojana - To start the business. Loans up to 50,000 Rupees can be availed. Most of the banks give this loan at nil margin.

2. Kishore Yojana - To expand your business. Loan from 50,000 - 5 Lakh Rupees.

3. Tarun Yojana - 5 - 10 Lakh Rupees Loan

Which types of businesses can get loans under Mudra Yojana?

Small & Micro Businesses. For e.g.

i.) Transport vehicles - For goods and passengers. E.g. e-Rickshaw, 3 Wheeler, taxi, 2 wheelers, tractors, tractor trolleys etc., compulsorily for commercial purpose only.

ii.) Salon, Beauty parlour, Gym, Tailoring shop, Cycle/ Motorcycle repair shop.

iii.) Food product sector - Achaar, Papad, Jam, Jelly, Biscuit, Ice, Ice , cream making, catering, canteen, tiffin services etc.

iv.) Textile - Handloom, Khadi, Zari, Zardozi, Stitching etc.

v.) Traders & Shopkeepers - Fruit seller, Kirana shop, trading shop

vi.) Agriculture not allowed.

vii.) Allied agriculture activities are allowed. For e.g. Pisciculture, Bee-Keeping, Poultry, Livestock rearing, Dairy etc.

Who will give these loans?

i.) Public/Private Banks
ii.) Non-Banking Finance Companies
iii.) Regional Rural Banks
iv.) Small Finance Banks
v.) Micro Finance Institutions registered under MUDRA.

Documents Needed:

SHISHU Yojana

i.) Application Form
ii.) 2 recent passport photos
iii.) Proof of identity (Aadhaar/ Voter card/ Passport/ DL)
iv.) Proof of residence address (Light bill/ Telephone bill/ Bank Statement)
v.) Address proof of business
vi.) If loan is needed for machinery or raw material – Provide Quotation of Machinery/ Raw Material from supplier. Supplier details also needed.
vii.) Self written Business Plan -Ask for help from Credit Officer
viii.) No processing charges
ix.) Nil margin
x.) PAN Card not compulsory

Kishor/ Tarun Yojana

i.) Bank Statement (6-12 months, depending on case)
ii.) ITR
iii.) Proof of continuity of business
iv.) Proof of ownership
v.) Licenses needed for business

Rate of Interest - Very nominal (Differs with bank)

How to apply for loans under Mudra Yojana?

i.) Go to your bank
ii.) Apply online through www.udyamimitra.in or www.psbloansin59minutes.com

Why do Mudra loan applications get rejected?

i.) You don’t have a clear business plan.
ii.) You are defaulter of some bank in the past.
iii.) Limited funds. Make sure your project is good enough to consider.