For a long time, the small enterprises in the country struggled a lot to get financial help from the banks. The help was expected in form of a loan which could help in the inception of new companies or which could help in the expansion of the existing companies. This had always been hard because of the tough financial eligibility criteria and hence it stalled the growth of the small and medium enterprise in the country.
To deal with the issue and to offer financial help to the companies, the government of India launched for Pradhan Mantri Mudra Yojana and here are all the details about the scheme.
What is Pradhan Mantri Mudra Yojana?
MUDRA stands for Micro Unit Development and Refinance Agency. The main aim of the scheme was to offer loan to small and medium enterprises under various domains. The domain ranges from retail to trading, manufacturing and many more. In addition to this, the loan can be applied in various categories and the only difference between these categories is the size of the loan. There are three categories available under the scheme which are,
Shishu Category–Under Shishu category, an Enterprise is eligible to get a loan of Rs 50,000 and this is sufficient for the small-scale businesses
Kishor Category– Under Kishor category, an enterprise is eligible to get a loan of upto Rs 5 Lakh which could help people in establishing a small factory or business.
Tarun Category– The limit of a loan under Tarun category is set at Rs 10 Lakhs
The repayment period of the loan would be between 5 years to 7 years and the loan is offered at a very nominal interest which is certainly helping people in achieving the payback and profitability easily. As per the information available, the interest rate under the scheme is between 10 to 18%.
How will the Scheme Work?
The person can simply apply for the scheme by the prescribed procedure and the loan will be disbursed to the account of the person. The repayment can be made by the applicant in the selected time duration and the loan would also help in creating employment as the business would employ several other people.
What is the Eligibility criteria for the Scheme?
The eligibility criteria to apply for Mudra Scheme is mentioned below
- The scheme is applicable to an Indian citizen who is at least 18 years old. However, the preference would be given to the women, SC and ST applicants.
- The scheme is not available for the medium or large enterprise.
- The disbursement of the loan is based on several factors like the business type, the risk of the domain, and the credit score of the applicant.
- The applicant would need various documents like the Aadhaar card, bank account details, bank statement and many other such documents.
How to Apply for the Scheme?
Follow the steps mentioned below to apply for the scheme
- You need to start by selecting the bank and once you shortlist the bank, you can visit the branch and get an application form for the MUDRA scheme.
- Now, you can simply fill in the forms with the required details and attach the required documents for the scheme.
- Once the documents have been attached, you can go ahead and submit the form to the bank and the approval status will be notified to you within 5 to 10 working days.
- A card will be issued to you after the successful approval of the loan and that would let you withdraw cash or pay bills.
What are the Benefits of the Scheme?
Here are some of the benefits of the scheme.
- The scheme would help in generating employment as the business would need a workforce.
- The interest loan offered by the government is low and hence it will eventually benefit the people a lot.
- Apart from this, the high repayment period of the loan is another advantage and the pre-payment of the loan is also offered by the government.
- The loan would also lead to interests educations in the P&L of the business which is another add-on.
Who will back the plan?
The plan is being backed by the central government of India and the banks are further providing support for the implementation of the scheme.
Details of the scheme
- Scheme Name – Pradhan Mantri Mudra Yojana
- Scheme Launch Date – April 2015
- Budget For scheme – Rs 20,000 Crore
- Scheme Launched by – Mr. Narendra Modi
Is this the way forward for the nation?
The scheme can certainly help in reducing the unemployment rate and in addition to this, the scheme will help in increasing the GDP of the country as well. Many other developing nations offer technical as well as financial support to the companies and India should also be a part of this race as it is going to prove to be beneficial in the long run.