To encourage small and micro industries in India, the government launched Pradhan Mantri Mudra Yojana in 2015. Availing investment funds to the unfunded is its main motto. The Yojana intends to provide financial assistance to non-corporate, non-farm small or micro-enterprises.
For the financial year 2018-2019, almost 6 Crore such business loan applications were sanctioned under this Yojana. The scheme offers a collateral-free loan to sole proprietors, partnership firms, private limited companies, public companies, and entrepreneurs with funding up to Rs. 10 Lakh.The Mudra Yojana has three financial products -
Seed business enterprises or businesses that are yet to be established can avail loan up to Rs. 50,000 under this vertical.
They can be availed by entrepreneurs looking for funds to expand their business. Under this scheme, one can avail loans between Rs. 50,001 to Rs. 5 Lakh.
Business owners can avail loan amounts of up to Rs. 10 lakh.Where to get Mudra loan?
One can avail Mudra loan from any financial institutions such as public sector banks, private sector banks, regional rural banks, state cooperative banks, and NBFCs. The financial institutions offer credits on Mudra Yojana interest rate ranging between 8.40-12.45%.Benefits of PMMY
- Since it is a Collateral free loan, the risk involved is minimal.
- A maximum amount of Rs. 10 Lakh can be availed for establishing/expanding a small or micro-enterprises.
- Working capital issues are solved with this funding.
- One can stretch the loan tenor to up to 7 years or may repay before it.
- The Pradhan Mantri Mudra Yojana interest rate is kept affordable and reasonable to help businesses grow.
Non-farm small/micro enterprises or non-corporate small business segments under Agriculture, Food, Service, Textile, Transport sectors are eligible for a loan under Pradhan Mantri mudra scheme. A reasonable rate of Mudra Yojana loan interest makes it apt for enterprises that need to establish or expand their trade unit.
Different credit schemes are also included under PMMY such as Micro credit scheme, Women enterprise program, Mudra card overdraft etc. Read this Pradhan Mantri mudra Yojana for everything you need to know about these schemes.