What is the scope of the Pradhan Mantri MUDRA Yojana?

The Narendra Modi government launched the Pradhan Mantri Mudra Yojana scheme in 2015 to facilitate micro-credit to small scale industries with up to Rs. 10 Lakh. Under this scheme, the MUDRA, a subsidiary of SIDBI, provides financial support to intermediaries such as commercial banks, RRBs, small finance banks, MFIs, and NBFCs for lending loans to the non-corporate non-farm micro-enterprises. The MUDRA loan helps fund micro-units through three products: Shishu, Kishore, and Tarun, to meet their capital needs and operating costs.

The loan scheme aims to make India a financially stable country with every person having the capital to open or operate their business. Employment is an essential factor in determining the GDP of a country. You can also apply for MUDRA loan online by visiting the bank’s website, following the eligibility criteria, filling the application form, and submitting it with relevant MUDRA loan documents. Here are some of its objectives:

It regulates the borrower and the lender of microfinance and provides stability in the sector through inclusive participation

Extends credit and finance to support micro-finance institutions and agencies that lend money to self-help groups, small businesses, traders, and individuals

Registers all micro-finance institutions and streamlining an accreditation and performance-rating system to help you evaluate and approach them when you apply for MUDRA loan

The scheme provides structured guidelines for borrowers to avoid business failures. You can also refer to them and check the lending procedures accepted by banks and financial institutions.

The scheme also introduces proper technologies to assist swift lending and monitoring of the disbursed loan amount

Who can apply?

There are three loan borrowers: starters, mid-level finance seekers, and advanced level growth seekers under the Pradhan Mantri MUDRA loan. The segments are Shishu, Kishore, and Tarun. Under Shishu, the maximum loan amount is Rs. 50,000. This stage caters to entrepreneurs who are about to start their business or are in their initial stages.

Under Kishore, the maximum amount you can borrow is Rs. 5 lakh. It targets business owners requiring funds between Rs. 50,000 and Rs. 5 lakh. If you have an established business and seek to expand it, you can apply for this loan online by checking the MUDRA loan eligibility criteria. You can visit the bank or lender’s website at any time of the day with an active internet or data connection on your PC or smartphone.

Under Tarun, the maximum loan amount you can borrow is Rs. 10 lakh after meeting the eligibility criteria. It is suitable for those who want a significant business expansion. Once you design a business plan, you can contact your nearest private or public sector bank for a MUDRA loan scheme under the PMMY. Fill the loan application form with the relevant details, submit it, and wait for the amount to get credited to your account.

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