Starting a business can be a daunting task, considering the financial requirements in the initial period. To help small and medium industries thrive, the Government of India is providing a Business Loan that is affordable and readily available. These loans are called MUDRA Loans and come with several useful features to help young entrepreneurs succeed in their business endeavours.
|List of Bank||Interest Rates||Loan Amount||Tenure|
|SBI Bank||Up to Rs. 10 Lakhs||1-5 years|
|Bank of Maharashtra||10.35%||Up to Rs. 10 Lakhs||1-5 years|
|Syndicate Bank||8.75%||Up to Rs. 10 Lakhs||1-5 years|
|Axis Bank||Up to Rs. 10 Lakhs||1-5 years|
|HDFC Bank||Up to Rs. 15 Lakhs||1-5 years|
|ICICI Bank||10.99%||Up to Rs. 20 Lakhs||1-5 years|
MUDRA Loans or the Pradhan Mantri MUDRA Yojna was launched in the year 2015 by Mr. Narendra Modi in an attempt to support the financial aid to SMEs. This led to the launch of Micro Units Development and Refinance Agency, also known as the MUDRA Bank.
The goal of a MUDRABank is to provide loans to micro-units so that they have enough finances to thrive and sustain consistently. For most small businesses, getting a loan directly from a bank is a challenge because they do not have collateral to provide or may not have the necessary monthly income to repay the EMI. MUDRA provides loans at subsidized interest rates to the deserving small units.
MUDRA does not provide the loan directly to individuals or entrepreneurs. Instead, the loans are provided through NBFCs, banks, and MFIs. These banks or financial institutions have partnered with MUDRA to make these Business Loans available to small and medium business owners.
MUDRA Bank Loans have several beneficial features, as mentioned below:
You have an array of schemes and products that you can choose from based on the requirement of the business and the stage of its development. The three schemes currently available are:
Shishu- This scheme covers loans of up to Rs.50000
Kishor- This scheme covers loans between Rs.50000 and Rs. 5 Lakhs
Tarun: This scheme covers loans above Rs.5 Lakhs up to Rs.10 Lakhs
Availability of Micro Credit Scheme: This is a special scheme that is available through Micro Financing Institutions. This provides a credit of up to Rs. 1 lakh for different activities within a microenterprise.
Refinance Schemes: Regional Banks, Commercial Banks, and even Scheduled Cooperative Banks can get up to Rs.10 Lakhs as refinancing to support microenterprises.
Special Women Enterprise Programs: As an attempt to encourage more women entrepreneurs, MUDRA offers special subsidies to women entrepreneurs. They have the advantage of a reduction of up to 25bps in the interest offered by the NBFC or the MFI.
Security against the microenterprise portfolio: With these loans, MUDRA also supports the lending partners by providing second loss default guarantee to enhance credit.
Availability of MUDRA Card: This is a Debit Card that is provided against the working capital portion of the loan. This allows the borrower to make multiple withdrawals and manage the working capital better.
Get Portfolio Credit Guarantee: Since the Business Loan does not demand any collateral, a fund named the Credit Guarantee Fund for Micro Unit is provided as a guarantee against the loan. This works almost like an insurance cover.
Flexible Repayment Tenure: It is possible to get up to 7 years to repay the loan depending upon the bank that you apply for a loan with.
Provide developmental support: MUDRA provides a credit-plus approach that provides developmental support services to address common issues like knowledge gaps, skill development gaps, information asymmetry, business, and financial literacy and lack of growth orientation. This helps create a better market and build a better ecosystem that is capable of delivering value that is sustainable and efficient.
To apply for a MUDRA Loan, the applicant is required to fulfill the following eligibility criteria:
MUDRA Loans are only available to businesses that are non-farming and non-corporate.
This loan is available only to micro and small enterprises.
To avail this loan, the applicant should not have a credit requirement of more than Rs.10 Lakh.
The loan is available to either a small business unit or an individual.
The applicant should have a good credit score and should not have defaulted on any loans that have been borrowed in the past from any financial institution.
The applicant should provide a correct business plan as per the guidelines of the institution that he or she is applying for a loan with.
Applying for a MUDRA Loan is quite simple. You can apply online on the several lending institutions that have partnered with MUDRA. An online application form must be submitted in order to get the loan processed. Once the documents and the business plans have been assessed, the loan amount is approved accordingly.
You can also visit the nearest branch of any partner lending institution and apply for a MUDRA Loan.
Applicants are required to submit following documents to have the loan processed:
A duly filled application form
A valid Photo ID
Current address proof
Bank statements are required by the lending institution
Detailed business plan
Ownership or proof for residence or office
Proof of continuity of the business
Valid trade references
Interest Rate: MCLR+2.75% (MCLR is currently 8.45%)
Customer Care: 1800-11-2211/ 1800-425-3800/ 080-26599990
For MSE Loans upto Rs.10 Lakh- MCLR+1.75%+ BSS (BSS is Business Strategy Spread which is 0.25%)
For Agriculture and allied activities up to Rs.10 Lakhs: MCLR+2.00%+ BSS
Customer Care: 1800-102-2636/ 1800-233-4526
Up to Rs.1.00 Lakh- 1 year MCLR
Above Rs. 1 Lakh up to Rs.10 Lakhs up to 1 year- MCLR+ 1.00%
Above Rs. 1 Lakh up to Rs.10 Lakhs above 1 year- MCLR+ 1.25%
Customer Care: 080-22073888
Interest Rate- 3 month MCLR+4.00% ( 3 month MCLR is 8.65%)
Customer Care- 1860-419- 5555
Customer Care- 1800-22-1006
Customer Care: 1800-103-8181
You can avail a MUDRALoan from several other lending institutions including public sector banks, private sector banks, Non Banking Finance Institutes, and Micro Financing Institutes. The list of the banks that you can apply for a MUDRALoan is available on the MUDRA website.
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 90+ Banks and NBFCs. We have served 7 million+ happy customers since 1989.