MUDRA Loan Scheme – Restoring Lives, Revitalizing Lives

MUDRA loan scheme launched by Indian’s Government a scheme in the name of the MUDRA loan on 8th April 2015 to extend affordable loans to the non-corporate, non-farm micro, and small-small enterprises to look after their financial needs. MUDRA loan scheme stands for Micro Units Development and Refinance Agency. The MUDRA scheme aims at bringing the target audience into the financial fold. The plan acts as a refinancing institution providing loans up to Rs. 10 lakhs maximum to the eligible sectors through the Commercial Banks/Cooperative Banks/NBFC and MFI.

Why is the MUDRA Loan Scheme, also known as Small-Business Loans?

MUDRA Loan Scheme aims to increase the aspiring young person/ budding entrepreneurs’ confidence to expand their business in the best possible manner with sufficient mode existing. There are approximately 5.77 crores smaller micro-units globally, engaging around 12 crore people, mostly individual proprietorship. Over 60% of units are owned by suppressed classes like scheduled Caste, scheduled Tribe, or other backward classes. Most such companies are outside the formal banking system’s scope, and hence they are forced to borrow money from informal sources or use their limited owned funds not enough to cater to their business needs. MUDRA Loan Scheme has bridged this gap. This way MUDRA scheme has been fulfilling the needs of the small business enterprises by assisting them with funds to kick start with the new venture and motivate the youth of today to take up small-small business ventures to earn a livelihood contributing in the economy. Amidst the coronavirus crisis, our economy got severely hit. Consequently, various sectors got immensely affected, resulting in business shutdowns, job losses, etc. In these dark times, schemes like MUDRA have helped many small business enterprises, budding entrepreneurs in restoring their financial condition by affording loans at lower rates.

Details about MUDRA Loan Scheme

Under the MUDRA loan scheme’s aegis, loans up to Rs 10 Lakh provided to income-generating small/micro-enterprises engaged in the manufacturing, trade, and service sectors. Under the PMJDY, an overdraft facility is classified under the MUDRA loan. These three categories of the MUDRA loan scheme based on the stated parameters making the business viable:

• Shishu loan– These kinds of loans are for entrepreneurs who are willing to establish their business. The maximum loan sanctioned under this is Rs. 5000 in favor of budding entrepreneurs.
• Kishore loan– Under the MUDRA scheme, this loan category acts towards those entrepreneurs looking to expand their established business by infusing funds to their venture. The loan sanctioned under this category ranges between Rs 5001 to Rs. 5 lakhs.
• Tarun loan- Under this category of loan, established businesses that are doing well but still are willing to diversify their field by opting for innovative ideas and techniques seek help. The loan sanctioned ranges between Rs 500001 to Rs 10 lakhs.

Who can Receive the Benefits of the MUDRA Loan?

What all Essential Documents required before Applying for the MUDRA Loan?

Before applying for the MUDRA scheme, individuals/ organizations must be ready with handy vital documents like business plans, duly filled application form, JYC document, proof of residence, identity proof, registrations & licenses, business address, and tenure proof, certificate of belonging to any special category, etc.

MUDRA Loan Scheme Interest Rate

The interest rate under the scheme varies from bank to bank as they follow their definite guidelines to finalize; however, the rates also differ from profile to profile and the enterprise’s business requirements.

In what ways MUDRA Loan Scheme has benefitted Women?

MUDRA scheme encourages women entrepreneurs by assisting them by availing easy loans at lower rates. For that, Govt. of India has urged various financial institutions, like Micro Finance Institutions, to consider extending privileges, such as reducing interest rates on the women borrowed loans. Currently, MUDRA facilitates a reduction of 25 Basis points in the interest rates offered from NBFCs and MFIs to women entrepreneurs.

What is the role of Aatmnirbhar Sena under the MUDRA Loan Scheme?

Aatmnirbhar Sena has been at the forefront and is playing an active role in assisting the Government in implementing the MUDRA scheme in all possible manners. Availing the benefits without the mechanism of how to use it leaves the service for no use; this is where our role as an Aatmnirbhar Sena comes into action. We have been assisting all the budding entrepreneurs and business organizations in availing the benefit of this MUDRA scheme by helping them at every step, starting from applying for the loan until the time of establishing their business. We provide mentorship programs, workshops, and skill development classes to make the entrepreneurs aware of the latest ideas and techniques of blooming their business.