The Government of India in an effort to provide easy financial backing to the Micro, Small and Medium Enterprise sector introduced MUDRA Loans in 2015, under the aegis of the Pradhan Mantri MUDRA Yojana. With the financing available under this scheme, micro and small business unit owners across India can avail a loan amount of up to Rs.10 lakh, through which they can facilitate the expansion of their ventures without hassle.
The loans available under the MUDRA scheme can be divided into three distinct product categories.
Shishu loans are available up to a quantum of Rs.50,000 and utilised to set up a business or to purchase machinery. Kishor loans range between the quantum of Rs.50,000 and Rs.5 lakh and are mostly utilised to expand the scope of business. Lastly, Tarun loans are available between Rs.5 lakh and Rs.10 lakh and are mostly available by established business persons to expand their operations further.
Those who do not meet these criteria or require a loan which exceeds the stipulated amount of Rs.10 lakh under the MUDRA schemes can alternatively opt for business loans from any of the financial institutions in India. These unsecured loans can go up to Rs.20 lakh and can be utilized to meet any number of financial requirements without hassle.