PM MUDRA Yojana (PMMY): Who Is Eligible And How To Apply

pm mudra yojana (pmmy): who is eligible and how to apply

New Delhi: The Pradhan Mantri MUDRA Yojana (PMMY) was launched by the Honorable Prime Minister on April 8, 2015, to provide loans up to 10 lakh to non-corporate, non-farm small/micro enterprises. These loans fall under the category of MUDRA loans within PMMY and are disbursed by Commercial Banks, RRBs, Small Finance Banks, MFIs, and NBFCs.

MUDRA has introduced three products: ‘Shishu’, ‘Kishore’, and ‘Tarun’, catering to the various stages of growth and funding requirements of micro-units. These products cover loan amounts as follows:

• Shishu: covering loans up to 50,000
• Kishore: covering loans above 50,000 and up to 5,00,000
• Tarun: covering loans above 5,00,000 and up to 10,00,000

To encourage entrepreneurship among the aspiring youth, particular emphasis is placed on supporting Shishu Category Units, followed by Kishore and Tarun categories.

MUDRA funding support is of two types:

• Micro Credit Scheme (MCS) for loans up to 1 lakh financed through MFIs.
• Refinance Scheme for Commercial Banks / Regional Rural Banks (RRBs) / Small Finance Banks / Non-Banking Financial Companies (NBFCs).

Features Of PM MUDRA Yojna:

• Comprehensive Financing: PMMY provides loans to cover both term loans and working capital needs for income-generating activities in manufacturing, trading, and service sectors, including allied agricultural activities like poultry, dairy, and beekeeping.
• Flexible Interest Rates: Lending institutions determine interest rates by RBI guidelines. For working capital facilities, interest is charged solely on the amount held overnight by the borrower.
• Loan Amount Range: While there’s no minimum loan requirement, the maximum loan amount under PMMY is Rs. 10 Lakhs.
• No Processing Charges or Collateral: Borrowers are exempt from paying processing charges and offering collateral when availing of Mudra loans.
• Sector Inclusivity: PMMY extends its support not only to enterprises in the non-farm sector but also encompasses those engaged in allied agricultural activities such as horticulture and fisheries.
• Interest Rate Calculation: The interest rate on Mudra loans is determined by the marginal cost of lending rate (MCLR), calculated by RBI guidelines.

How To Apply For MUDRA Loan:

MUDRA loans are offered by Commercial Banks, RRBs, Small Finance Banks, MFIs, and NBFCs. Borrowers have the option to approach any of these lending institutions directly or apply online through the official portal www.udyamimitra.in.

Purpose of MUDRA loan:

Mudra loan is extended for a variety of purposes which result in income generation and employment creation. The loans are extended mainly for:

• Business loans for Vendors, Traders, Shopkeepers and other Service Sector activities
• Working capital loan through MUDRA Cards
• Equipment Finance for Micro Units
• Transport Vehicle loans – for commercial use only
• Loans for agri-allied non-farm income-generating activities, e.g. pisciculture. bee keeping, poultry farming, etc.
• Tractors, tillers as well as two-wheelers used for commercial purposes only.