MUDRA loan was introduced by the government of India under the Pradhan Mantri Mudra Yojana (PMMY) to help smaller enterprises, non-corporate and non-forming, meet their financial needs both to cover up the capital as well as the operational costs to set and run a business. In this article, we will stress on the eligibility to apply for a MUDRA loan.
These loans have surely been designed to help the small and micro enterprises, however, there still are some eligibility criteria that a business or an individual needs to fulfill to qualify for getting a loan under this scheme.
Mentioned below are the entities that can apply for this loan.
- Those with a minimum age of 18 years and a maximum of 65 can consider applying for this loan.
- These loans can be provided to the non-farming non-corporate income-generating businesses in trading, manufacturing, and services.
- The requirement of credit must be ₹ 10 Lakh or lower.
- Businesses must be engaged in agriculture services from 1st April 2016.
What Are The Financial Bodies That Are Allowed To Give Out Mudra Loans?
- Each and every bank, be it a public bank, a privately owned bank, or a regional rural bank, is eligible to provide these loans to small businesses, however, for banks to give out these loans, there are some criteria to fulfill.
- For a bank to be providing MUDRA loans, it should have to profitable for 2 consecutive years
- The net performing assets for the public sector banks, private sector banks, and regional banks should not be more than 15%,10%, and 6%.
- The net worth of the bank in question should be Rs 250 cr for the private and public sector, while regionals banks need to have a net worth of Rs. 50 cr
Who All Can Avail MUDRA Loan?
You might be wondering what are the kind of businesses that can actually move forward and benefit from these loans. Worry not, we have summed it up for you.
- Individuals that identify themselves as Shopkeepers and vendors, can apply for a loan ranging up to ₹ 10 Lakh for different business activities such as covering the operational costs.
- This loan scheme is super useful and beneficial for small businesses that are trying to make a mark for themselves in the textile industry. For example that deal in khadi work, knitting, weaving, etc.
- Mudra funding can also provide benefits to the businesses that are into food services such as storage of food, tiffin services, and food stalls.
- Loan under this scheme can be availed by the businesses that are into agricultural activities such as dairy farming, poultry, fishing, etc.
- Businesses that are into social entrepreneurship and those serving other communities to provide services such as beauty parlors and salons, gymnasiums, dry cleaning shops, medical shops, tailoring shops, etc.
Documents for Vehicle Loan
- application form of Mudra Yojana
- Vehicle loan application form
- 2 passport size photos
- Identity proof such as Aadhaar Card, Passport
- Address proof such as Aadhaar Card, telephone or electricity bill
- Income proof
- Bank statement for last 6 months
Documents for Business Installment Loan
- application form of Mudra Yojana
- Loan application form
- 2 passport size photos
- Identity & age proof such as Aadhaar Card, Passport
- Address proof such as Aadhaar Card, telephone or electricity bill
- Proof of ownership of the enterprise/residence
- Proof of qualification, establishment, and business continuity
- Trade references
- 2 years ITR & CA certified financials
- Bank statement for last 6 months
Documents for Business Loan
- application form of Mudra Yojana
- Loan application form
- Identity & age proof such as Aadhaar Card, Passport
- Address proof such as Aadhaar Card, telephone or electricity bill
- Proof of ownership of the enterprise or residence
- Proof of qualification, establishment, and business continuity
- Proof of business continuity
- last 12 months Bank statement
- Last two ITRs
We hope with this detailed account and prerequisites of MUDRA loan, it would be helpful for you to uncomplicate the entire process because post the documentation and application are the funds you have been trying so hard to get to establish your dream business. Give it a good thought and go for it.