MUDRA (Micro Units Development and Refinance Agency)

-Paris

Khandare

Points Covered

Sr. No. Particulars Page No.

1 Introduction 12 What is MUDRA Loan Bank? 23 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

6What 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

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.

Sr. No. Parameters Details

1 Scheme Name Pradhan Mantri Mudra Yojana2 Launch Date 8th April, 20153 Last Date No Last Date

4 Target Audience Small Business Owners

5 Loan Amount From Rs. 50,000 – Rs. 10,00,000

6Scheme 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

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.

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

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…

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.

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….

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.

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

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.

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.

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.

Thank You