5 Benefits of the MUDRA Loan

Most entrepreneurs lack access to formal channels for borrowing money. It affects business and growth opportunities. Hence, the Indian Government introduced MUDRA or Micro Units Development and Refinance Agency to ensure that small businesses get financial support from banks and non-finance banking institutions.

The MUDRA Loan covers individuals belonging to three income categories, like Sishu, Kishor, and Tarun. They cater to startups and existing businesses aiming to expand. Small business firms apply for it to get financial aid to expand. It helps you increase your scope and provides liquid funds for urgent payments.

High loan amount

The amount offered under the MUDRA Loan scheme starts from Rs. 50,000 up to Rs. 10 lakh for startup enterprises, small business units, and MSMEs. The credit products help you grow and expand your business or manage operational needs through easy finance schemes.

No collateral

When you apply for PM MUDRA Loan, you need not pledge security against the borrowed amount. It is an unsecured loan that you get from lenders to fund your business expenses.

Hassle-free services

After meeting the eligibility criteria, the lender approves your request and starts processing the amount. You receive the amount in your Bank Account to help you meet your financial needs with quick services, easy clearances, and revenue to expand your business.

Favourable for small firms

All individuals covered under specific income-generating micro-enterprise activities under the MUDRA Loan Yojana get financial support for empowerment. The Government is the credit guarantee for borrowers, which means they bear the responsibility if you fail to repay it. Small business units like food vendors and shopkeepers also get benefits from the scheme.

Multi-purpose

This loan scheme is a boon for vendors, shopkeepers, working capital loans through the MUDRA Cards, equipment financing for micro-units, and transport vehicle loans. You need to check and compare schemes using the EMI calculator before finalising the lender. It helps you meet fund and non-fund based needs at nominal interest rates from legitimate lenders.

The institutions

Apply for MUDRA Loan at any lender to meet your startup expenses. The institutions include private and public sector banks, small finance banks, regional rural banks, NBFCs, and microfinance institutions.

Online process

Ensure to keep the documents ready with the application form, such as ID, address, and business proofs. Find a lender registered under the scheme by logging on to the official website. Upload the documents, specify the loan amount and tenure, and wait for the financial institution to review your form. You receive the MUDRA card to withdraw the funds for business purposes after approval.

Conclusion

These loans are available to socio-economically backwards to improve their livelihood and the overall rural economy. Start your business, change infrastructure, or upgrade machinery with the funds.

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