Pradhan Mantri Mudra Yojana ( for Micro Unit Development & Refinance Agency)

1. MUDRA (Micro Units Development and
Refinance Agency)
-Paris Khandare

2. Points Covered
Sr.
No.
Particulars Page No.
1 Introduction 1
2 What is MUDRA Loan Bank? 2
3 What is the MUDRA Loan Yojana ? 3
4
What are the objectives of the MUDRA Loan
Yojana ?
4 - 5
5
Who is eligible for loan under MUDRA Loan
Yojana ?
6 - 7
6
What are the documents required for
applying for loan under MUDRA Loan Yojana
?
8 – 9
7
What are the benefits of MUDRA Loan
Yojana ?
10 - 11
8 Mudra Loan Card ? 12

3. Introduction
 The current policy of Prime Minister Narendra Modi is
quite focused on developing the Indian economy.
 JanDhan Yojana was born out of this objective of the PM
and under this Yojana, PM Narendra Modi had launched
the Micro Units Development and Refinance Agency or
the MUDRA Bank on 8th April’15.
 Formally launched in the 2015 Union budget of India, the
MUDRA scheme or the Pradhan Mantri Mudra Yojana
(PMMY) was aimed at providing financial assistance to
the small scale entrepreneurs located in remote areas,
outside the access of regular areas of banking
functionality.

4. Sr.
No.
Parameters Details
1 Scheme Name Pradhan Mantri Mudra Yojana
2 Launch Date 8th April, 2015
3 Last Date No Last Date
4
Target Audience Small Business Owners
5
Loan Amount From Rs. 50,000 – Rs. 10,00,000
6
Scheme Stage Shishu (Rs. 50 K), Kishor (Rs. 5 Lakh)
&
Tarun (Rs. 10 Lakh)
7
Scope Of Scheme Across India
8 Launched By PM Narendra Modi

5. What is MUDRA Loan Bank?
 MUDRA is a financial initiative by PM Narendra Modi,
crated in order to facilitate the micro units and provide
them sufficient funds in order to develop.
 Small businesses are often unable to avail loans from
banks because of lack of collateral and insufficient funds
to pay off the interest.
 There are almost 577 crore small businesses currently
functioning in India. According to the PM, helping these
businesses grow would in turn lead to the development of
the Indian economy. Hence, this scheme was launched.
 MUDRA is still not a fully fledged bank and is in its initial
stages.

6. What is the MUDRA Loan Yojana?
 This is a scheme to provide loans to small businesses and
micro institutions. For now, it will just refinance these
institutions.
 This scheme would intervene in providing finance to these
micro institutions in three stages:
Loan upto
Rs.
50,000/-
Shishu
Loan
From Rs.
50,000/-
to Rs.
500,000/-
Kishor
Loan from
Rs.
500,000/-
to Rs.
10,00,000
/-
Tarun

7. What are the objectives of the MUDRA Loan
Yojana?
 MUDRA Yojana is launched keeping in mind various
objectives to be fulfilled throughout the implementation of
this scheme :
 To lay down policy guidelines to finance micro/small
enterprises
 To get all Micro Finance Institutions and entities registered
and regulate the same.
 To help small businesses grow and develop their
enterprise further.
 To assist lower income groups in setting up and
developing their business.
Conti…

8.  To help set up responsible financial practices in order to
prevent over borrowing for lower income entrepreneurs.
 To help create easy access to finance for the unbanked
and also help lower the cost of finance.
 To give SC/ST preference in lending.
 To regulate all Micro Finance Institutions dealing with
manufacturing, service and trading.
Thus, MUDRA Loan will help all small businesses gain easy
access to finance and regulate the policy guidelines for the
same.

9. Who is eligible for loan under MUDRA Loan
Yojana?
 Under the MUDRA Yojana, all small businesses and
enterprises in need of finance are eligible for a loan.
1) Businesses of Propritory as well as partnership nature are
eligible.
2) Basic Eligibility criterion :
These target business clients were handpicked carefully as
they proved eligible to avail the services of the Mudra Yojana
scheme that lays down certain conditions to be satisfied for
the same like:
 Small manufacturing unit
 Shopkeepers
 Fruit and vegetable vendors
 Artisans
Conti….

10. 3) Another pressure point in the scheme is the type of
eligible lending institutions that can practice this scheme
and extend financial assistance to the eligible borrower
base. A rough idea of the same can be inferred from the
technical definition of Mudra loans like the regional rural
banks, scheduled commercial banks and state to urban
co-operative banks. In addition to these institutionalized
lenders under the Mudra Yojana scheme, we do have
another list of;
 Micro financial institutions like societies and trusts
 NBCFs and MFIs that have been subjected and
approved to implement the scheme.

11. 4) There are list of business for which Mudra loan cannot be
Taken :
Sr. No. Mudra Loan Cannot Taken for
1 Personal Requirement
2 Educational Purpose
3 Buying Personal Car or Bike
4 Rich Businessman

12. What are the documents required for applying for
loan under MUDRA Loan Yojana?
Documents Listed Below :
 Self attested proof of identity along with the loan
applicant’s 2 passport size photographs.
 Quotation of items and machinery to be purchased.
 Details of suppliers and machineries as well as other
items to be purchased.
 Identity of ownership of business and business address
along with copies of necessary licences and certificates.
 Proof of category life SC/ST and others if any.

13. What are the benefits of MUDRA Loan Yojana?
 First off, no necessary collateral or loan application fee is
required to place an application for loan.
 Apart from this, another key feature of this scheme is that
its interest rate is only 9% - 12% (defer from Bank to
Bank).
 Tenure to repay the loans taken from MUDRA, is 5-7
years. ( Till date not fixed tenure given.)
 With such key features , easy access, systematic
guidelines and low cost of finance, this will indeed help
the small businesses and entrepreneurs from lower
income groups to develop and grow and increase their
social upward mobility and in turn develop the country’s
economy as well.

14. Mudra Loan Card ?
1) When the loan is passed, one will get a MUDRA card,
similar to a credit card with limit up to 10% of loan
amount to purchase working capital.
2) In essence, on one hand when the card act as a credit
card with a pre-approved loan amount, it also acts as a
debit card. Allowing ATM withdrawals.
3) The Mudra Cards will work with RuPay platform and can
be used at PoS ( Point of Sales). Thus the card will allow
users to:
 Withdraw cash from ATMs.
 Swipe the card at PoS.
 Can be as a credit card to avail the overdraft facility.