Apart from the Pradhan Mantri Awas Yojana (PMAY) and Pradhan Mantri Dhan Jan Yojana (PMDJY), the Indian Government also launched Pradhan Mantri Mudra Loan (PMML). They wanted to promote Micro, Small, and Medium Enterprises (MSMEs) around the country. The scheme gained more attention after the ‘Make in India’ campaign.
Mudra Loan scheme: Under the Mudra Loan, start-up companies and small business can avail of a credit anywhere between INR 50,000 to INR 10 lakh. It helps such companies to grow and expand. For this purpose, Mudra has partnered with regional and state banks, Micro Finance Institutes (MFI), and other lending institutes.
The revolutionary scheme focuses on helping the neglected section of the country, self-dependent and self-reliant individuals. The Mudra Loan scheme also aims to increase employment opportunities and improve non-corporate small business sectors. The policy also eliminates the need for business owners to rely on private money lenders to avail funds, which come with exorbitant interest rates.
Mudra Loan offerings: The loan offers several facilities. They include –
Micro credit scheme: The scheme provides financial help through MFIs, who thereby give business loans up to INR 1 lakh. The people typically eligible for such loans are those involved in specific micro enterprise activities, joint liability group, and self-help groups.
Mahila Uddyami Yojana: This part of Mudra Loan scheme aids the women entrepreneurs. They help individual businesswomen, women’s joint liability group and self-help groups. Additionally, they may receive some concessions as well on interest rates.
Refinance scheme for banks: Mudra allows scheduled co-operative banks, regional, and commercial banks to refinance the loan amount. Such a facility is available only if the business loans are taken for micro enterprise activities.
Mudra card: It is a unique credit which makes funds available to small business owners. It also comes with some flexibility. You can use it as a credit card with overdraft service or as a debit card in ATMs.
Credit guarantee fund: This special fund was created specifically for Micro Units. Precisely why they are termed as Credit Guarantee Fund for Micro Units (CGFMU). It falls under the scrutiny of National Credit Guarantee Trustee Company Ltd. Eligible entities can avail micro loans through this scheme.
Equipment finance scheme: This part of the Pradhan Mantri Mudra Loan enables the micro and small business units to avail the loan for upgrading or purchasing equipment or machinery. This way, the SMEs can improve their production techniques and increase the overall productivity and business efficiency.
Credit to micro enterprises: One of the significant aspects of Mudra Loan is to increase the benefits and the beneficiaries under this scheme. A large number of Indians are currently working in sectors related to land transport, food production, textile production, and community services. Several custom-made and schemes have been launched to help the micro industries succeed and grow.
Overall, the Mudra scheme has built excellent infrastructure, thereby supporting the development and other such promotional activities. The Mudra Loan also follows some financial practices which keep the client details discreet and is further useful for micro industries.
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