Kolkata: Mudra loans are offered to youths of India to promote entrepreneurship. The loans are targeted to facilitate micro businesses in the non-farm sector. One can apply for these loans in commercial banks or regional rural banks, small finance banks or micro finance institutions. Some NBFCs also offer Mudra Loans. By the way, Mudra is an acronym for Micro Units Development & Refinance Agency.
According to an official statement, between April 2015 and November 2023, a total of 44.46 crore loans were sanctioned under Mudra loans and out of that number as many as 30.64 crore, or 69%, were given to women. Mudra loans have three sub categories — Shishu, Kishore, and Tarun — depending on the amount applied for.
What is a Mudra loan
Some of the businesses that are typically financed by Mudra loans include:
- Agriculture related activities
- Communities, social, and personal service activities
- Equipment finance scheme for Micro Units
- Food products
- Textile products sector and activities
- Transport vehicles used for transport of both goods and passengers
- Shopkeepers and traders
What are the 3 categories of Mudra loan
The categories of Mudra loans are Shishu, Kishore, and Tarun.
Shishu loans: These are the smallest loans for micro businesses and are up to Rs 50,000
Kishor loans: These loans are between Rs 50,000 and Rs 5 lakh
Tarun loans: These range between Rs 5 lakh and Rs 10 lakh for more matured businesses
Tarun plus loans: These loans are for those borrowers who have taken and repaid Mudra loans successfully. These loans can be up to Rs 20 lakh
How to prepare for a Mudra loan
The following are the steps that one should go through to prepare for a Mudra loan. The first is to draw up a business plan, funding needs and projections. Also the business has to fall under the micro and small enterprise category for which Mudra loans are given. A Mudra loan application form has to be filled up, which also has to mention the repayment plan. The loan will be approved by the lending institution based on the soundness of the plan and the applicant’s creditworthiness.
The Pradhan Mantri MUDRA Yojana was devised by the Centre in April 2015 to promote entrepreneurship with financial assistance up to Rs 10 lakh and which are offered by commercial banks, regional rural banks, small finance banks, micro finance institutions and NBFCs (non-banking financial companies. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
