Mudra loan facility is a financial initiative to promote micro-units and provide them with ample funds to assist them in their business growth. Because of lack of funding and insufficient funds to pay off interest, medium- and small enterprises are frequently unable to make use of loans from financial institutions.
The nation currently has more than 577 crore small businesses operating. In the end, helping these companies grow will lead to economic growth.
Key objectives of Mudra Yojana
The initiation of MUDRA Yojana was done keeping in mind several goals to be fulfilled during the application of this yojana. The most important of these are:
For laying down policy regulations for financing small/ micro enterprises
Getting all the Micro finance Institutions and related entities enrolled and then standardising the same
For facilitating the small businesses to develop and expand further
Supporting lower-income groups in building and developing their business
To help in creating easy access to finance for unbanked and help in reducing their cost of finance
For legalizing standardising all Micro finance Institutions that are dealing with trading, manufacturing, and service
What kinds of loans are offered?
According to the funding options available under this program, the loan limits and interest rates differ in order to accommodate this loan for the growth period of the respective business. The restrictions and interest rates offered in effect are as follows:
Shishu Loan: Loans up to an INR 50,000 cap with an interest of 1 per cent monthly or 12 per cent annually. For such a loan, the repayment duration is up to 5 years.
Kishore Loan: Loans between INR 50000 and INR 5 lakh. The interest rate will be based on the bank, as per the scheme guidelines and taking into account the credit history of the applicant. Loan repayment period depends on the bank’s rules.
Tarun Loan: Loans from INR 5 lakh up to INR 10 lakh. The interest rate will be based on the bank, as per the scheme guidelines and taking into account the credit history of the applicant. Loan maturity period depends on the bank’s rules.
A total of 27 Public Sector Banks, 31 Provincial Rural Banks, 17 Private Sector Banks, 36 Micro finance Institutions, 25 Non-Banking Financial Institutions and 4 Co-operative Banks have already been selected to disburse this loan.
What are some of the business activities for which Mudra loan can be availed in the food products industry?
- Pickle and papad producing units
- Jam manufacturing units
- Facilities associated with the preservation of agricultural produce
- Sweet shops
- Small food stalls
- Canteen or catering services
- Cold storages
- Ice-cream making facilities
- Ice making units
- Bakery facilities
What kind of agricultural businesses can avail a Pradhan Mantri Mudra Loan?
- Beekeeping
- Pisciculture
- Livestock
- Poultry
- Fishery
- Agribusiness centres
- Agriclinics
What kind of textile businesses can avail the Mudra Loan?
- Powerloom/handloom facilities
- Chikan work units
- Zardozi/Zari work units
- Hand embroidery/computerized embroidery units
- Facilities involved in dyeing and textile printing
- Knitting units
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