MUDRA enables beneficiaries to avail the best of a business loan. Short for Micro-Units Development and Refinance Agency (MUDRA), the scheme lets borrowers enjoy a business loan that ranges between ₹50,000 to ₹10 lakh. The loan is sanctioned on the basis of different categories, namely Shishu, Kishore, and Tarun. The loan amount available under the Shishu scheme is up to ₹50,000, Kishore (₹50,000-₹5 lakh), and Tarun (₹5 lakh-₹10 lakh).
Benefits of a MUDRA Loan
The MUDRA loan offers several notable benefits that include:
- The loan can be availed in rural as well as urban areas of the country.
- Financial support can be availed by start-ups as well as small-scale micro businesses.
- Small amounts of business loans can be acquired through affordable interest rates.
- The government stands as a guarantor for borrowers who take a loan against this scheme. In the case that the borrower fails to make the repayment, the loss is borne by the government.
- The scheme is great for food vendors, shopkeepers, and small business owners.
- It facilitates the interest of people who especially have no access to basic banking facilities in rural areas.
- Women beneficiaries can avail loans at lucrative interest rates.
- One does not have to present collateral to avail this loan.
- The MUDRA scheme strengthens the government’s initiative to promote and foster innovation in the country to build a greater economic infrastructure.
While every state has successfully taken advantage of the MUDRA scheme, Telangana Planning Board vice-chairman B Vinod Kumar recently stated his concern over applications in a letter to the Union Finance Minister Nirmala Sitharaman.
As per Kumar’s statement, only 10.62 lakh of the total population within the state was covered under the Pradhan Mantri MUDRA Yojana as opposed to the considerably larger number of applicants. Inability to service all the applications has led to officials stating that the target has been crossed and no further loans can be sanctioned.
Kumar further added that the banks were not even accepting further applications for the loan. He emphasized the need for Telangana to be given a fair share of MUDRA loans as only about 17.86% of the population in the country was covered under the scheme until March 31, 2020. He has requested the Centre to offer an additional target of sanctioning 30 lakh MUDRA loans to the beneficiaries of Telangana.
Recent Inclusion – MUDRA Card
The MUDRA card is handed to every beneficiary of the loan scheme. When you apply for the loan, you can access this card, which is essentially a debit card. The MUDRA card allows you to access the funds that are dispersed through the loan and adds to your convenience.
When applying for the MUDRA loan, you will have to furnish the following documents:
Application Form: The application form is offered by the bank or the institute where you’ll be applying for the loan. Depending on the loan category you are seeking, you must duly fill the form.
Proof of Identity: Proof of identity includes the Aadhaar card, voter ID, passport, driving licence, or any other type of official identity proof document.
Proof of Address: Proof of address can include the Aadhaar card, voter ID, passport, or utility bills.
Photographs: Two passport-sized photographs of the applicant.
Additional Documents: Business plan or quotation of the items that the loan amount will be used to serve.
The MUDRA loan is a great opportunity for you to build your dream of owning a business. Special benefits offered through the loan further make it a very good means to acquire much-needed funding. Visit Finserv MARKETS to stay updated on all the introductions made against the e MUDRA loan and PMAY scheme.