What is MUDRA LOAN and how to get it in 2023?
In India, Mudra Loans are considered as one of the most popular financial products for small businesses. Mudra stands for Micro Units Development and Refinance Agency, a scheme launched by the Government of India in April 2015, to provide financial support to small businesses and entrepreneurs who do not have access to traditional banking and financial services.
Mudra Loans are targeted towards small businesses, traders, manufacturers, artisans, and individuals who are looking to start their own business ventures. The loans are aimed at helping these individuals to set up, expand or modernize their businesses. This scheme is beneficial for both the borrowers and the government, as it helps in creating employment opportunities and boosting the economy.
There are three types of Mudra Loans:
Shishu Loans: Loans up to Rs. 50,000 are provided under this category. This is aimed at those who are starting a business for the first time, and they need a small amount of capital to get started.
Kishore Loans: Loans ranging from Rs. 50,000 to Rs. 5 lakhs are provided under this category. This category is for those businesses that are already established, and they need a loan to expand their business or increase their production capacity.
Tarun Loans: Loans ranging from Rs. 5 lakhs to Rs. 10 lakhs are provided under this category. This is for those businesses that are well-established and need a larger loan to expand their business further.
The process to apply for Mudra Loans is simple and straightforward. Here are the steps to follow:
Step 1: Identify the Lender
Mudra loans are provided by various banks and financial institutions. You can check the list of banks on the Mudra website and select the one that suits your requirements.
Step 2: Prepare the Documents
The next step is to prepare the documents required for the loan application. The list of documents required may vary depending on the bank you choose, but generally, the following documents are required:
Identity proof (Aadhaar Card, Voter ID, Passport)
Address proof (Aadhaar Card, Voter ID, Passport)
Proof of business ownership (GST registration, Shop Act license, etc.)
Bank statements (6 months to 1 year)
Business plan
Project report
Step 3: Fill the Application Form
After preparing the documents, you need to fill in the application form. You can download the application form from the bank's website or get it from the bank's branch.
Step 4: Submit the Application
After filling in the application form, you need to submit it along with the required documents to the bank's branch.
Step 5: Wait for Approval
The bank will review your application and verify the documents. If everything is in order, the loan will be approved, and the funds will be disbursed to your bank account.
Mudra Loans are an excellent way for small businesses and entrepreneurs to access capital for their business ventures. The interest rates on Mudra Loans are comparatively lower than other business loans, and the repayment terms are flexible, making it easier for borrowers to repay the loan.
In conclusion, Mudra Loans can be a great source of financial support for small businesses and entrepreneurs. By following the steps mentioned above, you can apply for a Mudra Loan and take your business to the next level.