PM Mudra Yojana- a very useful financial support the entrepreneur
Pradhan Mantri MUDRA Yojana is a very effective scheme for the entrepreneur, launched by our honorable Prime Minister Mr. Narendra Modi on April 8, 2015. Classified as MUDRA loans in all over India, this loan is providing up to 10 lakh to those who want to start a business as well as try to set him or her as an entrepreneur and also providing to the non-farm small/micro-enterprises. The borrower can apply to RBI selected lending institutions for getting the loans or can apply online through a portal named www.udyamimitra.in
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What is MUDRA Yojana?
The full form of MUDRA is Micro Units Development and Refinance Agency Limited developed as a refinancing or lending institution. This institution is approving loans maximum of Rs. 10 lakhs to the eligible entrepreneur or enterprises. RBI has selected several banks for giving this loan such as Commercial Banks, Small Finance Banks, Co-operative Banks, RRBs, NBFCs, and MFIs.
Structure of MUDRA Yojana:
This institution has been primarily developed as a refinance company with a completely owned subsidiary of SIDBI. It has been initially started with Rs.1000 crores authorized capital and Rs.750 crores paid-up capital.
The prime responsibility of the MUDRA Yojna or scheme is to help micro-enterprises engaged in eligible definite activities to develop. Apart from this, the Yojna also supports the eligible financial institutions that engaged in extending the MUDRA scheme.
For this endeavor, Pradhan Mantri MUDRA Yojana partnering with micro-lending institutions which are working in the region as well as state-level to facilitate Micro Finance in India. Through this Yojana, Micro Finance can create an economic development tool that meets the objective of the provision of employment generation, financial literacy, and social support to the people from the lowest strata of the society. Not only that, but it can also provide ample other opportunities which are very important to sustain life.
Mission of MUDRA Yojana:
The mission of PM Mudra Yojana is to develop an inclusive as well as a comprehensive value, based on entrepreneurial culture. The main mission of this scheme is to provide security and success to the people of the country. That’s why; this value needs to be sustainable while partnering with financial institutions.
Types of Schemes under Pradhan Mantri Mudra Yojana
Three products have been launched under the aegis of Pradhan Mantri MUDRA Yojana or PMMY, named ‘Shishu’, ‘Kishore’, and ‘Tarun’. It will help to signify the stage of the development as well as funding needs of the beneficiary and offer a reference point for the next phase of development.
The 3 categories are
- Shishu – loan amount approved up to Rs. 50,000
- Kishor – loan amount approved from Rs. 50,001- Rs 5 lakh
- Tarun – loan amount approved more than 5 lakhs and up to Rs 10 lakh
Purpose of Loan assistance – MUDRA is actually a business loan, so the borrower cannot use this money to fulfill their personal needs. It is usually provided to the new entrepreneur who has just started a business and small business which is engaged with manufacturing, trading, and providing services. A businessman can utilize the fund obtained through this Yojna for acquiring the capital asset like raw material to develop or continue their business, for marketing purposes, and also increasing the working capital.
Interest rates – MUDRA loans can be obtained with very nominal interest rates which are usually based on the amount of loan sanctioned.
The key benefits of MUDRA loan:
- The main target for the MUDRA loan is to help to grow the Micro and small enterprises which are engaged with income generation.
- Any collateral or any kind of security is not required to submit by the borrower to obtain this Loan.
- The loans are provided for the funded and non-funded category, inducing an element of flexibility in the usage of funds.
- This loan is provided for two categories, funded and non-funded category, inducing an aspect of flexibility in the usage of this funds
- The loans can be availed in different forms like term loans, letters of credit, overdraft facility, or bank guarantees
- This scheme usually does not approve any minimum amount.
Offers of Pradhan Mantri MUDRA Yojana:
Pradhan Mantri MUDRA Yojna has a variety of offers. Some of them are –
- Micro Credit Scheme – as a business owner you can obtain this business loan through Micro Financial Institutions (MFIs) up to 1 lakh. Individuals who engaged with specific microenterprise activities, different joint liability groups, and self-help groups are eligible to obtain this loan.
- Mahila Uddyami Yojana – Women Enterprise Program, known as Mahila Uddyami Yojana is a significant part of this scheme targeted particularly at women-oriented Enterprise. This scheme is designed in such a way, by which the women entrepreneurs are encouraged. In such cases, Some Special concessions might be afforded such as up to 0.25% reduction in interest rates on the granted amount.
- Refinance Scheme for Banks: This MUDRA Yojna allows a variety of banks including Commercial banks, Regional Rural Banks, Scheduled Co-operatives Banks, etc to refinance loan amounts. This is up to Rs 10 lakh per unit and this refinance facility can be availed only if your business is related to microenterprise activities
- Mudra Card –Mudra Card is actually an innovative and updated credit idea by which small businesses can access the credit very easily. In this case, the card owner needs to be flexible. This card works like a credit card with an overdraft limit and you can use it as a debit card while using an ATM.
- Credit Guarantee Fund – Also recognized as a portfolio credit guarantee, the Credit Guarantee Fund for Micro Units (CGFMU) involves the formation and use of a particular fund. This is also an innovative idea under the scheme of Pradhan Mantri MUDRA Yojana which is supervised as well as managed by the National Credit Guarantee Trustee Company Ltd.
- Equipment Finance Scheme – This scheme is also an important part of the MUDRA Yojna that enables small enterprises as well as entrepreneurs and also the micro-units to obtain financial support to purchase or upgrade qualifying equipment.