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Mudra Loan: Who can avail? Eligiblity?

MUDRA Loan:who can avail,eligibility

Any individual running non-corporate non-farming business activities can apply for a MUDRA loan under the Pradhan Mantri Mudra Yojana Scheme. The following are the Mudra Loan Eligibility criteria:

  1. Applicants should have an age limit of 18 years and a maximum of 65 years.
  2. Individuals, startup firms, business owners, entrepreneurs, SMEs, and MSMEs are eligible.
  3. Traders, Artisans, Manufacturers, Retailers, etc. engaged only in trading, services, and manufacturing sectors are also eligible.
  4. If the applicant’s requirements in less than 10 lakh.
  5. Applicants with good repayment history, and no bank dues.
  6. People belonging to the SC/ST/OBC category.
  7. Applicants with no loan defaults with any financial institution.

The following business bodies are eligible for Mudra Loan:

1. Business vendors and shopkeepers:

Shopkeepers and vendors like fruits and vegetable vendors can apply for a loan ranging up to ₹ 10 Lakh.

2. Service Sector Units: 

Beauty parlours, boutiques, parcel services, automobile repairs, dry cleaning, gymnasiums, saloons, tailoring units, etc.

3. Textile industry: 

Textile industries such as handloom, knitting, silk work, apparel design, embroidery, traditional dying, etc. can get monetary help from mudra loans.

4. Food production sector: 

Start us dealing in food processing, shops, food parcel services, or cold storage can avail this mudra loan and expand their business.

5. Agricultural activities: 

Loans under this scheme can be availed for agricultural activities such as dairy farming, poultry, fishing, and the improvement of small canals and wells.

6. Vehicle: 

Loans will be available to purchase passenger cars, goods transport vehicles, and three-wheelers.

The eligibility documents for the Mudra loan vary for different loan purposes. The documents required for specific purposes are as follows:
  1. Documents for Vehicle Loan
  • Duly filled application form for Mudra Yojana
  • Vehicle loan application form
  • 2 passport-size photos of the applicant
  • Identity proof such as an Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
  • Address proof such as an Aadhaar Card, Passport, Bank statements, telephone or electricity bill.
  • Income proof
  • Lastly, bank statement for the latest 6 months
2. Documents for Business Instalment Loan
  • Duly filled application form for Mudra Yojana
  • Loan application form
  • 2 passport-size photos of the applicant
  • Identity proof such as an Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
  • Residential Address proof such as an Aadhaar Card, Passport, Bank statements, telephone or electricity bill.
  • Proof of ownership of the enterprise or residence.
  • Trade references
  • Proof of qualification, establishment, and business continuity
  • 2 years ITR and CA certified financials
  • Bank statement for the last 6 months
3. Documents for Business Loan
  • Duly filled application form for Mudra Yojana
  • Loan application form
  • Identity and Age proof such as Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
  • Residential Address proof such as an Aadhaar Card, Passport, Bank statements, telephone or electricity bill
  • Proof of ownership of the enterprise or residence
  • Proof of qualification, establishment, and business continuity
  • Bank statement for the last 12 months
  • Proof of business continuity
  • Income tax return for recent 2 year
Is the Agriculture sector Eligible for Mudra Loan?

MSMEs include the agricultural sector, but only a few types of businesses in the agricultural sector are eligible for Mudra Loan:

  • Livestock
  • Poultry
  • Beekeeping
  • Fishing
  • Agribusiness centers
  • Agriclinics
  • Food and agri-produce business
Must Read: MUDRA Loan Application Form
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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Project Report For Mudra Loan

Mudra Bank loan offers loans at affordable rates to new companies. Registered company owners and entrepreneurs for setting up small & medium businesses can benefit. To get a Mudra loan the first and foremost requirement is to submit a Project Report to the Bank. 

The Project Report should include all business-related financial, economic, managerial, and technical aspects of the project or business. The report should be easy to understand and in a neat format. Applicants can create the project report on their own or with the help of an outsider like CA’s, tax consultants, or a private company who has particular knowledge.

What are the contents of a project report for Mudra Loan?

The project report consists of all business-related details. It should cover both the technical and financial aspects of the particular business. Below are the components of the project report.

  1. Introduction – Description of the business.
  2. Aim/Vision – Focus or target for which the enterprise shall work.
  3. Objective: Just as the aim, the objective of the enterprise should also be mentioned.
  4. Area of Expertise – Key areas or skills on which employees have expertise shall work.
  5. Details about the Promoters and Executive: Profile descriptions like education qualification, experience, etc.
  6. Source of Funds: Explain in detail how you are planning to raise funds for the business, owned, borrowed, etc.
  7. Financial Budget – Complete financial information on expenditure inquired like machinery cost, total cost, furniture cost, and working capital required.
  8. Financial Statements: These should the financial statements like profit & loss statements, cash flow statements, and balance sheets.
  9. Estimation: The report should include a projected estimation of sales, purchases, expenses, incomes, etc.
  10. Business Equipment Details – Exhaustive list of equipment, parts, plants and machinery to be used in the project
  11. Commercial Aspects – Plans to be executed related to commercializing the project
  12. Company Profile – Details on the company’s background, launch, initiation, milestones, and achievements
  13. Export Orders – Information on export orders, whether domestic or international, if any
  14. Information about Employees – Total number of employees working on the project with their details
  15. Information of Products and Services: Details of all the products and services to be used in the project
  16. Logistics Details: Information on transportation costs to be incurred whether private or commercial
  17. Manufacturing Processes: Details of types of manufacturing processes to be used in the project
  18. Market Potential: Information about the target market, target customer, market demand of the product, etc.
  19. Advertising Strategies: Advertising strategies to be applied or executed for the project
  20. Ratio Analysis: Computation and analysis of different ratios and their implications.
  21. Space or Land Requirement: Information on space or land requirements, if required
  22. Third-Party Details: Details of the third party engaged with the project if any like raw material suppliers, traders, manufacturers, etc.
  23. Break-Even Analysis: Specify the break-even point of the project; and its viability in terms of cost and profit.
  24. Conclusion: All project reports should have a conclusion at their end
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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MUDRA Loan Application Form

Pradhan Mantri MUDRA Yojana encourages the young generation into entrepreneurship by promoting them with financial aid, focusing on the growth of micro-enterprises. Under the Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has created involvements named ‘Shishu’, ‘Kishore’ and ‘Tarun’ to denote the different stages of development and funding needs of the beneficiaries of micro, small, and medium entrepreneurs and also for the next phase of growth for their business. The amount covers: 

  1. Shishu: covering loans Up to 50,000/-
  2. Kishor: covering loans above 50,000/- and Up to 5 Lakh
  3. Tarun: covering loans above 5 Lakh and Up to 10 Lakh
What are the Important Fields and sections of the MUDRA Loan Application Form?

Below sections of the MUDRA application form are as follows:

A. For office use:
  1. Enterprise Name
  2. Application Serial Number
  3. Name of the branch
  4. Category – Shishu/Tarun/Kishor
B. Business Information:
  1. Name of the Enterprise
  2. Constitution of Enterprise – Proprietary/Partnership/Pvt
  3. Current Business Address – including State/ PIN
  4. Mobile Number
  5. E-mail ID
  6. Date of Commencement
  7. Proposed Business Activity – Skilled/Unskilled
  8. Registration Details
  9. Registered Office Address
  10. Social Category
C. Background Information of Proprietor/Partners/Directors:
  1. Serial Number, Name, DOB, Sex,
  2. Residential address with mobile number,
  3. Academic qualifications
  4. Experience in the line of activity
  5. Pan Card
  6. Proof of Identity/Address Proof
  7. Relationship with Bank/Directors, If any
D. Name of Associate Concerns and Nature of Association:
  1. Name of Association Concern
  2. Address of Associate Concern
  3. Bank Details
  4. Nature of Association concern
  5. The extent of Interest as Pro/Partner/Director or just Investor in Associate Concern
E. Banking/Credit Facilities Existing: (In Rs.)
  1. Type of Facilities – Current AC, Savings AC, Cash AC, Term Loan, LC/BG
  2. Current Bank Details
  3. Limit Availed
  4. Outstanding as of Date
  5. Security Lodged
  6. Assets Classifications
  7. If Banking with this Bank, the Customer ID
  8. Certification Statement from the Borrowers that no loan was taken from any bank or financial institution apart from the one mentioned in Section E.
F. Credit Facilities Proposed: (In Rs)
  1. Type of Facilities – Cash Credit, Term Loan, LC/BG
  2. Total Amount
  3. The purpose for which required
  4. Details of Primary Securities Offered
G. In case of Working Capital: Basis of Cash Credit Limit applied: (In Rs.)
  1. Actual Sales in the last two years
  2. Projected figures of sales, revenue, inventory, working cycle, creditors, debtors, and promoter’s contribution.
H. In case of Term loan requirements, the details of machinery/equipment may be given as under:
  1. Type of the machine/equipment
  2. The purpose for which it is required
  3. Name of the supplier
  4. The total cost of the machine
  5. A total contribution that is being made by the promoters in INR
  6. The total amount of loan that is required
  7. Repayment with moratorium period requested for 
I. Past Performance/Future Estimates: (Rs.)

Past Performance / Future Estimates and Actual performance for two previous years of:

  1. Net Sales
  2. Net Profit
  3. Capital (Net Worth in the case of Companies)
J. Status Regarding Statutory Obligations:
  1. Registration under the Shops and Establishment Act
  2. Registration under the MSME (Provisional/ Final)
  3. Drug License
  4. Latest Returns for Sales Tax Filed
  5. Latest Returns for Income Tax Filed
  6. Any other outstanding dues outstanding
K. Declaration:
  1. Declaration with photograph(s) and signature(s) of Proprietor/ Partners/ Director
  2. Mention of Date and Place
  3. Acknowledgement Slip for loan Application under Pradhan Mantri MUDRA Yojana
How to download the MUDRA Loan Application Form?

CLICK HERE::  

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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What are the Documents Required for Mudra Loan?

PMMY loan offers up to Rs. 10 Lakh for MSMEs for non-corporate non-farming origin businesses. The objective is to encourage the young generation into entrepreneurship by promoting them with financial aid, focusing on the growth of micro-enterprises. The applicant will require some specific documents to produce to the bank. Below are the documents required for Mudra Loan:

1. Proof of Identity
  • Applicant should produce self-attested photocopies of:
  • Aadhar Card
  • Driving License
  • Voter ID
  • PAN Card
  • Passport
2. Proof of Address
  • Utility Bill copy of electricity, telephone, gas, property tax, etc.
  • Aadhar Card
  • Driving License
  • Voter ID
  • Passport
  • Latest bank account statement
3. Duly fill out the application form for the Mudra loan
4. Applicant passport size photo in 2 number
5. Proof of Business
  • Certificate of Registration
  • Business License
  • Articles of Organization
  • Proof of Business Ownership
  • Or any other documents confirming the business existence and address
6. Business Plan/Project Report

A business plan also known as a project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval. With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your project report.

7. Other Mudra Loan Documents
  • Photos of owners, partners, etc.
  • Proof of Category – SC/ST/OBC
  • Estimated balance sheet for the loan period
  • Income/sales returns
  • Last 12 month’s Bank Statement
  • Partnership Deed or MoA or AoA
  • Sales during the period and estimated sales for the loan period
  • Business report certifying the economic and technical viability of the business

 Based on the type of business and bank, the documents required for Mudra loan change as per the specific loan schemes like Shishu, Tarun, and Kishor.

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MUDRA loan Scheme

Micro Units Development & Refinance Agency (MUDRA) Limited is an institution set up by the Government of India for development and refinancing activities relating to micro units. The Hon’ble Finance Minister announced MUDRA in the 2016 Budget. Under MUDRA, loans are provided under three schemes namely ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth and funding needs of the beneficiary micro unit. Micro Units and Entrepreneurs in India can avail this loan. The prime aim of the loan is to help the Micro & small enterprises in India, which are the backbone of the Indian industry. The actual name of the project is Pradhan Mantri MUDRA Yojana (PMMY). The Mudra loan extends its support for a variety of purposes, which contribute to income generation and employment creation in Manufacturing, Services, Retail, and Agri sectors. Allied Activities

What is the purpose of MUDRA?

One of the biggest bottlenecks for SMEs in India is the lack of financial support from the formal banking or financial sector. Many times the lack of formal financing hampers the growth of small businesses and makes them ineffective at competing with larger players. To remove this bottleneck and provide finance to micro units or Entrepreneurs, MUDRA Bank has been set up as a subsidiary of SIDBI. MUDRA will take responsibility for refinancing all financiers or financial institutions that participate in financing Small Businesses, Societies, Trusts, Section 8 Companies, Co-operative Societies, Small Banks, Scheduled Commercial Banks, and Rural Banks involved in lending to micro or small businesses engaged in manufacturing, trading, and services activities.

L0an Schemes

The loan is currently provided under three schemes in the Pradhan Mantri MUDRA Yojana. The three schemes are as follows:

  • Shishu: Loan of up to Rs.50,000/
  • Kishor: Loans of above Rs.50,000 to Rs.5 lakhs.
  • Tarun: Loans of above Rs.5 lakhs to Rs.10 lakhs
What are the Eligibility criteria for MUDRA?

Any Indian Citizen who has a business plan for a non-farm sector income-generating activity such as manufacturing, processing, trading, or service sector and whose credit need is less than 10 lakh can approach either a Bank, MFI, or NBFC for availing of MUDRA loans under Pradhan Mantri Mudra Yojana (PMMY). The terms and conditions of the lender would have to be followed for availing of loans under MUDRA. The lending rates adhere to the RBI guidelines issued in this regard from time to time. As MUDRA is a refinancing institution, it does not offer loans directly. Instead, existing NBFCs, Financial Institutions, Banks, Primary Lending Institutions, etc., provide loans through MUDRA.

The target audience for MUDRA loans are millions of Proprietorship / Partnership Firms running small manufacturing unit or service sector units like shopkeepers, fruits/vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors, and others, in rural and urban areas.

What are the Documents Needed for MUDRA loans?
  • MUDRA Loan Application
  • Project Report
  • Proof of Identity: like PAN / Drivers License / Aadhaar Card / Passport and more.
  • Residence proof like recent telephone bill/electricity bill or property tax receipt and more.
  • Applicant’s recent photograph which is less than 6 months old
  • To purchase machinery or other items, provide a quotation.
  • Name of supplier or details of machinery or prices of machinery
  • Proof of identity/address of the business like tax registration, business license, and more.
  • Proof of category like SC/ST/OBC/Minority, if applicable

It is important to note that there is no processing fee or collateral requirement for obtaining a MUDRA loan.

In the above list, a Business plan also known as a project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval. With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. Also, our reports are accepted by all public and private sector banks working in India. Click to create your project report.