Pradhan Mantri Mudra Yojana - Funding the Unfunded | Mudra Loans

Pradhan Mantri Mudra Yojana


Pradhan Mantri Mudra Yojana


Pradhan Mantri Mudra Yojana (PMMY) is a programme directed towards supporting income generating micro enterprises engaged in manufacturing, trading and services sectors with a loan requirement up to 10 lakh. Recently, the activities allied to agriculture are also included as eligible under PMMY. Any Indian Citizen, who is eligible to avail of a loan and has a business plan for an income generating activity can avail of MUDRA loan under PMMY. Millions of common men and women of this country, who run a small business, have almost remained outside the net of formal institutional finance, in spite of their large contribution to the economy. MUDRA is Central Government innovation of funding the unfunded.

Pradhan Mantri Mudra Yojana (PMMY) is open and is available from all Bank branches across the country. It has been the strongest endeavor of the Prime Minister Narendra Modi to bring the unbanked population into the banking system. Mudra Bank Loan comes as a vision from the Prime Minister by the slogan, ‘Fund the Unfunded’. MUDRA means Micro Units Development and Refinance Agency. This initiative has been started after the success of PM Jan Dhan Yojana. The importance of the scheme is to bring the unbanked people under the mainstream banking in order to make the neglected section of population self reliant and self dependent.

MUDRA loans are disbursed in three categories as below

Sr.No Category Amount
1. Shishu Upto Rs.50,000
2. Kishor Rs.50,000 to Rs.5 lakhs
3. Tarun Rs.5 lakhs to Rs.10 lakhs

Objective of Pradhan Mantri Mudra Yojana

The objective of Pradhan Mantri Mudra Yojana scheme is to fund the unfunded. Supporting the small entrepreneurs of India is the biggest way to help the Indian economy grow and prosper. To bring the millions of units which are existing outside the formal banking fold and are unable to sustain or grow due to lack of finance or relying on informal channels which are expensive or unreliable. By bringing such enterprises to the formal financial system and extending affordable credit will help them to grow and prosper.

Benefits of Pradhan Mantri Mudra Yojana

Under the scheme, individuals who take Mudra Lons will benefit the people who run small sector industries, micro units. The scheme will empower the needy people and small businesses which will surely make a difference and hence the Indian economy will also start rising. The Prime Minister Narendra Modi believed that not only that the large business and dealers are the main source of the Indian economy, even the smallest of them can affect the whole Indian economy.

The majority of small businesses owners in India have always remained outside the ambit of mainstream bank credit. This is just because banks and financial institutions often focus their products and services for the secured business who would repay at higher interest and have their monies secured. PM Mudra bank yojana would help in getting this trend changed. The Pradhan Mantri Mudra Bank Yojana is said to benefit more than 58 million small business owners in the country. This is one sector under which more than 120 million people are employed and this working population mostly comes from less privileged sections of society.

Documents Required for Pradhan Mantri Mudra Yojana

  • The following documents wherever applicable based on the purpose of your loan to be submitted along with the application.
  • Proof of Identity: Self attested copy of Voter’s ID Card/ PAN card/Aadhaar Card/Passport/Photo IDs issued by Govt.authority etc. 
  • Proof of Residence: Recent telephone bill/electricity bill/property tax receipt (not older than 2 months)/Voter’s ID Card/Aadhaar Card/Passport of individual/Proprietor/Partners/ Bank pass book or latest account statement duly attested by bank officials/ Domicile Certificate/ Certificate issued by Govt. authority/Local panchayat/Municipality etc. 
  • Photos (two copies) not older than 6 months of individual/proprietor/Partners/Directors.
  • Quotation of machinery & other items to be purchased.
  • Name of supplier/details of machinery/price of machinery and/or items to be purchased.
  • Proof of identity & Address of the Business Enterprise – Copies of relevant licenses/Registration certificates/other documents pertaining to the ownership, identity, and address of the business unit, if any.
  • Proof of category like SC/ST/OBC/Minority etc.
  • Statement of accounts (for the last six months), from the existing banker, if any.
  • Last two years balance sheets of the units along with income tax/sales tax return etc. (Applicable for all cases from Rs.2 lakhs and above).
  • Sales achieved during the current financial year up to the date of submission of application.
  • Project report (for the proposed project) containing details of technical & economic viability Memorandum and Articles of Association of the company/Partnership deed of partners etc.
  • In absence of third party guarantee, Asset & Liability Statement from the borrower including Directors  & Partners may be sought to know the net-worth.