Documents Required for Mudra Loans

There are the following significant documents amongst others, which business owners must provide to the bank, in order to Apply for the Mudra Loans:

• Promoters and guarantors are required to submit both - Statements of Liabilities, Assets, and the recent Income Tax Return.
• If your property is offered as 'Primary', you have to submit copies of either Lease or Title Deeds to the bank.

There are three kinds of loans that a person can apply for under Mudra Loan - Vehicle Loans, Business Installment Loans, and Loans for Group and Rural Business Credits.

The documents for getting loans in these three categories are discussed as follows:

The documents required for a vehicle loan under Mudra Loan:

• Application form of PMMY (Pradhan Mantri Mudra Yojana) for a vehicle loan
• 2 passport-size photographs of the borrower
• Address proof documents
• Identity proof documents
• Income proof documents
• Bank statement for the last six months

The documents required for a business installment loan:

• Application form of PMMY (Pradhan Mantri Mudra Yojana) for a business installment loan
• Address proof documents
• Identity proof documents
• Income proof documents
• Proof of establishment
• Trade references
• Qualification proof
• Business continuity proof
• Bank statement for the past six months

The documents required for a loan for the group and rural business credits:

• Application form of PMMY (Pradhan Mantri Mudra Yojana) for a loan for the group and rural business credits.
• Address proof
• Photo id proof
• Age proof
• Bank statement for the last 12 months is mandatory
• Business vintage proof
• Proof of ownership of office or residence: GST registration, the receipt of the tax paid, trade license
• Income tax return for the past 2 years

There are numerous benefits that you can derive after applying for Mudra Loans and some of them are discussed as follows:

• Mudra Loan has been created by the Government of India as a business promotion scheme in India. The Mudra Loan will offer empowerment and financial support to those business owners, who are doing micro-level and small-scale business. This step would improve the economic condition of India in the future as small business dealers would be able to earn more money and business opportunities.
• The remote areas of India are not suitable to open a new company and run it successfully. In addition, people living in remote areas do not get seamless banking services. The people, who need money to run their small-scale businesses and for other matters, take loans from those money lenders present in remote areas by paying a high-interest rate. The poor people do not get beneficial facilities from these money lenders that Mudra Loans can provide. In order to lower the exploitation of the poor people in terms of business, borrowing of money, and uplifting India's small business sector, Mudra Loans are the best.
• The facility of credit guarantee is provided to the borrowers under the loan scheme of MUDRA. The borrowers under the credit guarantee get risk sharing. Risk sharing is provided to customers for a wide range of homogenous loans and risk sharing is not offered to customers on a loan guarantee just for a single debt.
• The funding support comprises of micro-credit schemes just to refinance schemes, small loans for commercial banks, scheduled co-operative banks, regional rural banks, securing of loan assets, and programmes for women's enterprises.
• Through Mudra Loans, both development and promotional support are offered to customers. The borrowers get the chance to improve their financial literacy, skill development, sectoral development, institution, and entrepreneurship development.
• A small-scale business owner can get a Mudra Loan within a range of 50,000 to 10 Lakhs. Therefore, a person can get the ability to borrow a low or high amount of money to support their partnership firm, a new startup, and so on.
• A mudra card is offered to the customers, who apply for Mudra Loans and this mudra card acts as a debit card. You can utilise your Mudra card to derive money in times of emergency.
• Mudra Loan is useful to reduce employment and the loan is provided to those poor people and vendors of fruits, who do not have any bank account.
• The hawkers, SC/ST enterprises, new startups, and business people belonging to the low-income groups, can apply for a Mudra Loan from banks and other financial organisations.