What is PM Mudra Loan? Who Can Apply and What's The Limit?

New Delhi: The Pradhan Mantri Mudra Yojana (PMMY) was launched in 2015 to give financial assistance to small and medium-sized businesses across the country. Small enterprises can use this government effort to get a Mudra loan of up to Rs. 10 lakhs to meet their financial needs. According to official data, the PMMY has disbursed loans worth Rs 18.60 lakh crore in the seven years since its creation. A total of 34.42 crore loan accounts have been opened for this purpose.

Loans Available Under PMYY

Under the PMYY, three different types of loans are available. These are the details:

1. Shishu: Up to Rs 50,000/-in loans

2. Kishor: covers loans exceeding Rs 50,000/-and up to Rs 5 lakh.

3. Tarun: covering loans worth more than Rs 5 lakh but not exceeding Rs 10 lakh.

It should be noted that a processing fee of 0.50 per cent (plus applicable tax) of the loan amount is charged when applying for a Tarun loan. In the case of Shishu and Kishor loans, however, there is no processing fee.

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Loan Eligibility Conditions Under PMYY

Any Indian citizen with a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading, or service sector and a credit need of less than Rs 10 lakh can apply for Micro Units Development & Refinance Agency Ltd. (MUDRA) loans through a bank, microfinance institution, or non-bank financial institution (NBFI).

Required Documentation

1. MUDRA Loan Application with self-attestation of identity and two passport-size photographs of the loan applicant

2. The lender's loan application, requests information about the applicant, past financial results, and the profile of the proposed activity.

3. Purchase of suppliers, machinery, and other goods for the intended operation

4. Identification of business ownership and address

5. Copies of all required permits and certificates are required to conduct the business or activity for which the funds are being used.

How Can I Apply For The PMMY?

With the support of prominent banks and financial organisations, you can apply for a Mudra loan under PMMY. The following are the steps to apply for a Mudra loan online:

1. Choose the bank or financial organisation you want to get a Mudra loan from.

2. Fill out the Mudra loan application form with your personal and employment information.

3. Submit your KYC documents, including your PAN card, Aadhar Card, or driver's licence, as well as any other relevant documents, such as address proof.

4. You must submit continuity proof of your business and financial documents if you have an established business.

5. The lender will grant the loan under the PMMY plan when you submit the application form and required papers.