The Government of India’s Pradhan Mantri Mudra Yojana (PMMY) is the most accurate and foolproof solution to your problem. Under this scheme, millions of youth and small entrepreneurs across the country are being provided business loans of up to ₹20 lakh without any guarantee. Whether you want to open a tea stall, start a boutique, or set up a large-scale manufacturing unit, the Mudra Yojana is ready to give wings to your dreams.
Four Categories of Mudra Yojana
The government has designed the Mudra Yojana to meet the needs of everyone, from a street vendor to a seasoned entrepreneur. Currently, it is divided into four main categories, the first of which is the Shishu Loan. This is for those starting a brand-new business and provides solid support of up to ₹50,000. The second category is the Kishor Loan, where if you already have a business and want to expand it slightly, you can avail a loan ranging from ₹50,000 to ₹5 lakh.
Next comes the Tarun Loan category, which provides funds ranging from ₹5 lakh to ₹10 lakh for medium-scale business expansion. The newest and most advanced category is the Tarun Plus Loan, which is for entrepreneurs looking to scale their business and offers loans ranging from ₹10 lakh to ₹20 lakh. This is specifically for businesses that have entered the next stage of expansion and require larger investments.
Eligibility for Mudra Loan
Getting a Mudra Loan has become easier and more transparent than ever before, as it does not require any collateral. To apply, you’ll need some basic documents, including an Aadhaar card, PAN card, or voter ID card for proof of identity. You can use your electricity bill, ration card, or Aadhaar card as proof of residence.
Required Documents
The most important document is your business plan, which should outline your proposed or existing business. You also need a solid banking record for the last six months, a passport-size photo, and, if applicable, a caste certificate. Thorough preparation of all these documents significantly increases your chances of loan approval.
Application Process
You can apply for a Mudra loan by visiting your nearest government or private bank, and the process is straightforward. First, choose your nearest commercial bank, regional rural bank, or small finance bank. Then, obtain the PM Mudra Yojana application form from the bank and select the appropriate category, such as Shishu, Kishor, or Tarun, based on your needs. Fill in your personal information and the details of your business carefully in the form.
Once the form is complete, attach all the relevant documents mentioned above and submit it to the bank. Bank officials will thoroughly review your documents and business plan, and if your project is deemed viable for the future, your loan will be approved swiftly. Upon approval, the loan amount will be credited directly to your bank account, allowing you to begin your work without delay.
Benefits of Mudra Loan
This scheme has sparked a wave of self-employment in the country, and its biggest advantage is that the interest rates are significantly lower than those of other commercial loans. Beneficiaries are also provided with a special Mudra card that functions as an overdraft facility. This card allows you to withdraw money from ATMs at any time for your working capital needs. This scheme is paving the way for steely self-reliance not only for men but also for women and giving a new strength to the rural economy.