PM Mudra Yojana 2024 : Empowering Growth Through MUDRA

PM Mudra Yojana (PMMY) is a India’s government scheme to provide affordable credit to the micro enterprises engaged in trading, manufacturing and service sector, including agricultural activities. Micro Units Development and Refinance Agency (MUDRA) is an NBFC, which provides refinance support to RRBs, commercial banks, MFIs, small finance banks and other NBFCs for lending to micro enterprises. Prospective business loan borrowers can avail MUDRA loans up to Rs 10 Lakh from a near by branch of a bank, NBFC, etc.  The NBFC also offers MUDRA card for working capital loans, cash withdrawals from any ATMs and making through POS machines.

Key Highlights of Mudra Loan

Loan Facility Cash Credit, Overdraft & Term Loan
Interest Rates Depends on the bank’s policy decisions
Loan Amount Up to Rs 10 lakhs (Up to Rs 20 lakhs proposed in Budget 2024)
Tenure Depends on the bank’s policy decisions
Processing Fees For Shishu category (loans up to Rs 50,000) – No processing fee
For Kishore & Tarun category – depends on the financial institution

PM Mudra Yojana Loan Interest Rates :

Mudra doe not set the interest rates of PMMY loans. The agency has given freedom to lending institutions over setting interest rates of MUDRA loans. Thus, prospective borrowers planning to avail MUDRA loan should contact the concerned bank/NBFC/MFIs for their MUDRA loan interest rates.

Below are the MUDRA loan interest rates offered by various banks :-

Lenders Interest Rates (p.a.)
Union Bank of India 10.55% – 12.05%
Punjab National Bank 9.40%
Canara Bank 10.30% – 15.00%
Indian Bank 10.80% – 10.90%

Features of PM Mudra Yojana :

Loan Amount

MUDRA loans are categorized as ‘Shishu‘, ‘Kishore‘, and ‘Tarun‘ to signify the development and funding needs of an applicant :

Category Loan Amount
Shishu Up to Rs 50,000
Kishore Above Rs 50,000 to Rs 5 lakh
Tarun Above Rs 5 lakh to Rs 10 lakh*

*  Budget 2024 has proposed to increase the Mudra loan limit to Rs 20 lakh for entrepreneurs who have repaid previous loans under the ” Tarun ”  category.

Collateral 

The loans are collateral free and are covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC).

Repayment Tenure 

MUDRA has not specified any repayment tenure for the loans refinanced through the PMMY scheme. The agency has given a free hand to the lending institution offering MUDRA loans to set their loan tenures as per their own rules and regulations set by the RBI.

Types of Mudra Loan Facility 

The loans under the PMMY scheme are offered in the form of term loan, overdraft and Cash Credit (CC).

Fees & Charges

The lending institution providing MUDRA loans can consider charging of upfront fee as per their internal guidelines. However, most lenders waive the upfront fee or processing charges for loans under the Shishu category.

Registration Process of PM MUDRA Yojana :

Prospective business loan borrowers can visit designated Public and Private Sector Commercial Banks, Cooperative Banks, Regional Rural Banks (RRBs), Micro Finance Institutions, Foreign Banks and Non-Banking Finance Companies for availing loan under PMMY.

Individuals can also apply for MUDRA loans online through UdyamMitra portal – www.udyamimitra.in

Eligibility Criteria of PM MUDRA Loan

MUDRA loans are offered to micro enterprise sector in manufacturing, service, processing, sector or trading including activities allied to agriculture. The prospective borrower should not be defaulter in any bank or any financial institution and should have a satisfactory credit track record.

The educational qualification (if any) of an applicant can also be assessed depending on the nature of the proposed activity, and its requirement. Furthermore, applicants may be required to have the necessary experience or skills or knowledge to carry out the proposed activity.

Eligible Borrowers of PMMY  

  • Individuals
  • Proprietary Concern
  • Partnership Firm
  • Private Ltd. Company
  • Public Company
  • Any other legal forms

Eligible Activities covered under MUDRA Loans

  • Transport Vehicle

    • Purchase of transport vehicles for transportation of goods and passengers such as auto rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, taxis, etc.
    • Tractors/Power Tillers/Tractor Trolleys/Two Wheelers used only for commercial purposes.
  • Community, Social & Personal Service Activities

    • Salons, gymnasium, boutiques, DTP and photocopying facilities, tailoring shops, dry cleaning, medicine shops, beauty parlors, cycle and motorcycle repair shops, courier agents, etc.
  • Food Products Sector

    • Papad making, biscuit/bread/bun making, jam/jelly making, ice cream making units, agricultural produce prevention at rural level, achaar making, cold storages, small service food stalls and day to day catering/canteen services, cold chain vehicles, ice making units, sweet shops, etc.
  • Textile Products Sector/Activity

    • Handloom, chikan work, traditional embroidery and hand work, computerized embroidery, traditional dyeing and printing, zari and zardozi work, powerloom, khadi activity, apparel design, knitting, cotton ginning, stiching and other textile non garment products such as vehicle accessories, bags, furnishing accessories, etc.
  • Business loans for Traders and Shopkeepers

    • Loan to individuals for running their shops
    • Trading and business activities/service enterprises
    • Non-farm income generating activities with beneficiary
  • Equipment Finance Scheme for Micro Units

    • Individual setting up micro enterprises by purchasing required machinery or equipment, with per beneficiary.
  • Equipment Finance Scheme for Micro Units

    • Pisciculture, poultry, livestock-rearing, apiculture, aggregation agro-industries, food & agro-processing, diary, fishery, grading, sorting, agri-clinics and agribusiness centers, etc. and services supporting mentioned activities that which promote livelihood and helps in income generation. Crop loans, land improvement such irrigation, canal and wells are excluded from the activities allied to agriculture.

Related Post : Pradhan Mantri Ujjwala Yojana 2024: Empowering Millions with Clean Energy Solutions

MUDRA Card

MUDRA Card is a RuPay debit card, which offers working capital loan in the form of an overdraft facility. The card allows multiple withdrawals and credits, digitalizing transactions and creating credit history for the borrower. MUDRA card is issued against MUDRA loan account and can be used across the country for cash withdrawals from ATM/micro ATM or make purchase using any Point of Sale (POS) machines. The borrower can repay the amount anytime, depending on the availability of surplus cash.

Documents required for availing PM MUDRA Loans

Documentation for availing loan under Shishu Category

  • Identify Proof – Self attest copy of Driving License/PAN Card/Voter’s ID Card/Aadhar Card/Photo Ids issued by Govt. authority/Passport etc.
  • Residence Proof – Latest telephone bill/property tax receipt (not older than 2 months)/Voter’s ID Card/Electricity Bill/Aadhar Card/Domicile Certificate/Passbook of proprietor or partners or latest bank account statement attested by bank officials/Passport/Certificate issued by local panchayat or government authority or municipality etc.
  • Recent photograph (2 copies) of an applicant, not older than 6 months.
  • Quotation of machinery or other items to be purchased
  • Name of supplier or price & details of machinery and/or items to be purchased
  • Proof of Identity and address of the business enterprise – copies of registration certificates/relevant licenses/other documents related to the ownership, address, identify of business unit, if any
  • Proof of category like ST/SC/OBC/Minority etc.

Documentation for availing loan under Kishor and Tarun Category

  • Identity Proof – Self certified copy of voter’s ID card/PAN Card/Aadhar Card/Driving License/Passport
  • Residence Proof – Latest telephone bill, property tax receipt (not older than 2 months), Voter’s ID card, Electricity bill, Aadhar Card and Passport of Proprietor/Partners/Directors
  • Proof of ST/SC/OBC/Minority
  • Identity/Address Proof of the Business Enterprise – Copies of registration certificates/relevant licenses/other documents related to the identity, ownership and address of business unit
  • Account statement of the last 6 months from the existing banker, if any
  • Balance sheet of the units of the last 2 years along with income tax or sales tax return, etc. (Applicable for all cases from Rs. 2 lakhs and above)
  • Projected Balance sheets of 1 year in case of working capital limits and for the loan duration in case of term loan (Applicable for all cases from Rs. 2 lakhs and above)
  • Sales achieved during the current FY up to the date of submission of application
  • Project report (for the proposed project) having details of economic and technical viability
  • Articles and Memorandum of association of the Partnership Deed of Partners/company/ etc.
  • In absence of third party guarantee, asset and liability statement from the applicant including directors and partners can be asked to know the net-worth.
  • 2 photocopies of Partners/Proprietor/Directors

FAQs on Mudra Loan


How to apply for the MUDRA loan?

To apply for a MUDRA loan, borrowers can submit an application online at the UdyamMitra portal – www.udyamimitra.in or through designated lending institutions. Applicants can also visit designated banks and financial institutions to apply for the loan.


What is the interest rate for Mudra loan?

Micro Units Development & Refinance Agency (MUDRA) does not determine the interest rates for PMMY loans. Lending institutions have the freedom to set the interest rates for MUDRA loans. Therefore, MSMEs interested in MUDRA loans should contact the relevant bank/NBFC/MFI to inquire about their Mudra loan interest rates.


What is collateral security in mudra loan?

MUDRA offers a loan of up to Rs 10 lakhs without collateral security. The collateral is covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC).


What is the repayment period in MUDRA loan?

Micro Units Development & Refinance Agency Ltd. (MUDRA) has not specified the repayment tenure of MUDRA loan. The lending institutions are free to determine the repayment tenure of their MUDRA loan borrowers based on the cash flow of their enterprise and the terms & conditions set by the of the lender.


What is the maximum limit of loan under MUDRA Yojana?

The maximum limit of MUDRA Yojana loan is Rs 10 lakhs (Up to Rs 20 lakhs proposed in Budget 2024).


What are the documents required for a MUDRA loan?

The documents required for Mudra loan include identity and residence proof of the applicant, copies of registration certificates and other documents related to the ownership, identity and address of the business unit.

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