Mudra Loan Process

MUDRA or Micro Units Development & Refinance Agency Limited is an institution setup by the Government of India for development and refinancing activities relating to micro units. MUDRA was announced by the Hon’ble Finance Minister in the 2016 Budget. Under MUDRA, loans are provided under three schemes namely ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth and funding needs of the beneficiary micro unit. This loan can be availed by Micro Units and Entrepreneurs in India.

Loan Under Mudra

Loan is provided currently under three schemes in Pradhan Mantri MUDRA Yojana. The three schemes are as following:

• Sishu - Covers loans up to Rs.50,000 for starting a business or for businesses in its early stages.

• Kishor - Covers loans up to Rs.5 Lakh for already established businesses seeking additional funding.

• Tarun - Covers loans up to Rs. 10 Lakh for well-established businesses meeting certain eligibility.

Who Can Apply?

The following individuals can apply for MUDRA loan:

1. Small manufacturing business owners

2. Fruit and vegetable sellers

3. Artisans

4. Shopkeepers

5. Those associated with various agriculture activities like livestock, dairy, pisciculture, poultry, fishery, etc.

Process to apply for Mudra Loan

Individuals have to follow the steps mentioned below to avail a MUDRA loan:

Step 1.

Keep the necessary documents ready. Applicants need to have the necessary documents required to avail a MUDRA loan. These include:

• Identity proof (Aadhaar, Voter ID, PAN, Driving License, etc.),
• Address proof (electricity bill, telephone bill, gas bill, water bill, etc.),
• Proof of Business (business registration certificate, etc.).

Step 2. 

Approach a financial institution(Most PSUs are partners) .Individuals can apply for a MUDRA loan with almost all leading financial institutions in India.

Step 3. 

Fill in the loan application form. Applicants then have to fill the MUDRA loan application form and furnish their personal and business details. They also have to ascertain the amount they want to avail before knowing how to apply for MUDRA loan scheme.

Once you’ve followed the above steps, the bank or financial institution will sanction the MUDRA loan into your account.