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Mudra Loan, Mudra Card, Interest Rates, Categories, Eligibility, and Other Details

Updated: Aug 30,2019 16:51 IST

Naveena

Mudra Loan is loan scheme introduced solely for Micro Enterprises and small scale industries by Pradhan Mantri Mudra Yojana. Mudra Loan are provided at lowest interest rates when compared to other loan providers. Details on Mudra Loan Categories, Documents Needed, Eligibility, Loan Schemes are all detailed in the content below.

Introduction of Mudra Loan 

Mudra stands for Micro Units Development and Refinance Agency Bank or MUDRA Bank is a public sector financial institution in India which provides loans at low rates to micro units, small businessmen and entrepreneurs to setup business or to extend the business. Pradhan Mantri Mudra Yojana (PMMY) is the scheme launched by Honorable Prime Minister on April 8, 2015 for providing loans upto 10 lakhs. Loans will be provided by the regional co-operative banks, rural banks, nationalized private banks, etc. Loans will be given in the form of credit cards called Mudra credit cards. The beneficiaries may swap it to purchase machineries or services to extend their business. The primary motive of Mudra loans is to encourage the small scale industry and provide needed financial support for the growth of the business. Key information related to Mudra Loan are given in the below table.
 

Loan amount

Rs.50000 to Rs.10 lakhs

Loan tenure

5 to 7 years

Interest rates

Varies according to the scheme and bank

 

What is the Mudra Loan Interest Rate?

Mudra Loan interest rates charged vary from bank to bank. Interest rates mostly vary between 12% and 20%. Mudra Loan Interest rates of some of the banks are listed in the below table.

Mudra Loan Bank

Interest Rates

HDFC

12.75% - 20%

Tata Capital

13.49% -19.5%

Kotak Mahindra Bank

11.5% - 15%

Capital First

13% - 20%

Citi bank

12.75% - 15.75%

Indusind Bank

12.99% - 18.25%

Standard Chartered Bank

12.50% - 17%

ICICI Bank

11.49% - 17.50%

Aditya Birla Finance

14%

Allahabad Bank

13.70%

Bank of Baroda

14.15%

Bank of Maharashtra

15.20%

Canara Bank

13.65%

Central Bank

12.70%

SBI

17.80%

Indian Overseas Bank

14.70%

What are the Categories of Mudra Loan?

Mudra loans by Mantri Mudra Yojana are provided under three categories based on the financial needs these categories are being laid down while introducing the loan. The three categories with other details are given below. 
  • Shishu  - up to a maximum of Rs. 50,000 may be given to the micro units
  • Kishor - more than Rs. 50,000 and up to Rs. 5 lakh will be given
  • Tarun - loan amount will be more than Rs. 5 lakh and up to Rs. 10 lakh

What is Mudra Card?

Mudra Card is provided for those availing Mudra Loan under Pradhan Mantri MUDRA Yojana (PMMY) scheme. It works like a debit card against the Mudra loan account and facilitates the withdrawal of working capital. Muliple withdrawal can be done using Mudra Cars but per day withdrawal is limited to Rs. 25,000 in POS. The card works with RuPay.  

What are the Categories under which Mudra Loan Can be Availed?

Mudra Loans are provided under three categories and one can avail loan under any of these three categories
  • Business Installment Loan (BIL):  Loan for working capital requirement, buying plant and machinery, renovating offices etc.
  • Business Loans Group Loans (BLG) and Rural Business Credit (RBC): We offer Drop line overdraft/Overdraft facility/Working capital loans
  • Vehicle loan: Commercial vehicle loan, Car loan and Two-wheeler loan

How to Apply for Mudra Loan Online? 

Mudra Loan aims at providing financial assistance to the small scale entrepreneurs located in remote areas, outside the access of regular areas of banking functionality. These loans are given by RRBs, Small Finance Banks, Commercial Banks, Cooperative Banks, MFIs and NBFCs. One who wants to avail loan approach any of the above mentional financing institutions to apply or can also apply Online through the given link > https://mudramitra.in/. The below are the steps to be followed.
  • Visit the above given link to apply for Mudra Loan.

  • Create username and password to register.

  • Fill in the loan application form.

  • Apply to the available and preferred lender and obtain the loan.

What are the Documents Needed for Mudra Loan?

Mudra Loan can be availed under three categories as mentioned above. So each category of loan would need different set of documents as proof. Find below the details of documents required.
Business Installment Loan Business Loans Group and Rural Business Credit  Vehicle Loan
Mudra application form Mudra application Form Mudra application form
BIL application form BIL/RBC application form Vehicle loan application form
Photo identity proof Photo identity and age proof 2 passport size colour photographs
Address proof Address proof Photo Identity proof
Establishment proof Ownership proof of residence/office Address proof
Bank statement (last 6 months) Business vintage proof Income proof
Ownership proof of residence/office Bank statement (last 12 months) Bank statement (last 6 months)
Proof of continuity of business Income tax return (last 2 years)  
Proof of qualification    
Trade references    

Mudra Loan Subsidy Scheme

Apart from financing to micro enterprises, few other schemes are made by Mudra Loan to exend its services o other development sectors. They are listed below
  • Micro Credit Scheme (MCS) for loans upto 1 lakh finance through MFIs.
  • Refinance Scheme for Commercial Banks /Regional Rural Banks (RRBs) /Scheduled Co-operative Banks – up to 10 lakh per unit.
  • Women Enterprise programme – specially for women entrepreneurs with lowest interest rates.
  • Securitization of loan portfolio – Supports Banks/NBFCs/MIFs for financing micro enterprises.

What is the Eligibility Criteria to Avail Mudra Loan?

Mudra loan mainly focuses on providing loans for small scale enterprises. Here are few eligibility criteria for availing the loan.  
  • Small Manufacturing Units
  • Service Sector Units
  • Small Industries
  • Fruit and vegetable vendors
  • Food processing units
  • Shopkeepers
  • Repair Shops
  • Machine operators
  • Proprietorship
  • Other small enterprises

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