What Is The Pradhan Mantri Mudra Yojana Scheme (PMMY)?

The Pradhan Mantri Mudra Yojana (PMMY) was started in 2015 by the Prime Minister of India, Mr Narendra Modi. This government scheme assists people secure bank loans of up to ₹20 lakh for their businesses.

The loans are offered by Housing finance companies, commercial banks such as the State Bank of India and its associates, Regional Rural Banks, Small Finance Banks, State cooperative banks, and Microfinance institutions. These loans do not have a regular rate of interest and the main rate of interest is about twelve12 It takes up to five years for borrowers to make repayments of the loans obtained.

In this article, you will get the detailed information about the Pradhan Mantri Mudra Yojana, its benefits, features, categories, fees and charges, its application process and much more.

What Is Pradhan Mantri Mudra Yojana?

The Pradhan Mantri Mudra Yojana (PMMY), launched on 8th April 2015 by Prime Minister Narendra Modi, provides business loans up to ₹20 lakh. These loans are offered by banks, housing finance companies, and microfinance institutions. Interest rates vary, averaging around 12%, with a repayment period of up to five years.

Benefits

MUDRA loans provide easy access to credit without collateral, helping small businesses grow, generate employment, and boost economic activity, especially in underserved sections of society. Here are some benefits of the Mudra Yojana:

• It assists businessmen by offering them concessional funding to start their own companies.

• Under this scheme, you do not need to offer any form of security to successfully apply for the loan.

• The loan amount can be used for operating expenses, to expand the business, to acquire machinery, or even to refurbish the building.

• It may be availed from a public sector bank or a new generation private sector bank, investor banks, regional banks, and even cooperative banks.

• The PMMY also consists of the Mahila Udyam Scheme which is for women entrepreneurs.

PM Mudra Yojana- Interest Rates

MUDRA loans are provided by banks to support small businesses and microenterprises in the non-corporate, non-farm sectors that need loans under ₹10 lakh. The interest rates for these loans start from 7.30% per annum, with a repayment period between 1 to 7 years.

Registration Process

You can Apply for the Mudra Loan Online via the mentioned link. Just by entering the personal details mentioned below:

• Name

• Mobile Number

• Payment Purpose

• Captcha

• Address

• Email

• User Name

You can Apply for a MUDRA loan offline by visiting the following institutions:

• Commercial business of public and private sector commercial banks.

• Cooperative Banks.

• Regional Rural Banks (RRBs).

• Micro-finance Institutions, also known as MFIs.

• Foreign Banks.

• NBFCs or Non-Banking Finance Companies.

Documents Required

The table showcases the major documents required for the PM Mudra Loans:-

Read More: Introducing the 'Entity Locker': A Safe Vault For Business Documents

Check Your Mudra Loan Status

Tracking your MUDRA loan application status is easy and can be done online, through the bank, or via the official MUDRA loan website. These methods help applicants stay informed about their loan approval progress.

Through the Bank's Website

• Visit the bank’s official website directly using your login details and check the loan status.

Visit the Bank

• You can also drop by the banking hall and ask an attendant to check the progress of your loan.

MUDRA Loan Official Website

• Log in to the official MUDRA loan website to check the status of your loan application.

List of Banks/NBFCs Offering Mudra Loans

MUDRA loans under the Pradhan Mantri Mudra Yojana (PMMY) are available from the following financial institutions:

• Axis Bank

• Bajaj Finserv

• Bank of Baroda

• Bank of Maharashtra

• Canara Bank

• Central Bank of India

• City Union Bank

• Flexi loans

• SFMG India Credit

• HDFC Bank

• ICICI Bank

• Indian Overseas Bank

• Lendingkart Finance

• Punjab National Bank (PNB)

• PSB Loans in 59 minutes

• Saraswat Bank

• State Bank of India (SBI)

• UCO Bank

• Union Bank of India

• Ziploan

For more details, you can contact these institutions directly or visit their official websites.

Factors Affecting MUDRA Loan Interest Rates

Several factors influence the interest rate on MUDRA loans, including the borrower's creditworthiness and business requirements. Knowing these factors can help applicants plan their finances better.

• Applicant’s Income: Higher income can lead to better rates.

• Creditworthiness: Good credit scores help get lower rates.

• Type of Business: Businesses with lower risks may get better rates.

• Loan Amount: The amount you borrow affects the interest rate.

• Repayment Period: Longer repayment terms may result in different rates.

Tips to Avail MUDRA Loan At A Low Interest Rate

Getting a MUDRA loan at a lower interest rate requires careful planning and meeting certain financial criteria. Understanding key factors can help applicants secure loans at the most affordable rates.

• Compare Offers: Browse various loan products through different banks and NBFCs to arrive at the best bargain.

• Business Type: The interest rate also varies depending on the type of business that you operate. While those with low risk ordinarily stand to benefit from better rates.

• Higher Turnover: Your business earnings or turnover rates might enable you to be charged low interest rates.

• Good Credit Score: Having a good credit score acts like a bonus.

• Income and Loan Amount: The interest rate could also vary depending on your income, the amount of loan required by you, and the period of loan repayment.

• No Previous Defaults: A poor credit history also means that you are likely to be charged high rates, but securing new loans becomes easier if you have paid off your previous loans in full and on time.

To get the correct interest rates there is nothing better than approaching the bank/NBFC in concern or surfing the internet to the respective website.