Micro Units Development and Refinance Agency Ltd. [MUDRA] is an NBFC supporting the development of the microenterprise sector in the country. MUDRA provides refinance support to Banks / MFIs for lending to micro units having loan requirement up to 10 lakh. MUDRA provides refinance to micro-business under the Scheme of Pradhan Mantri MUDRA Yojana. The other products are for development support to the sector. The bouquet of offerings of MUDRA is mentioned below. The offerings are being targeted across the spectrum of beneficiary segments.
MUDRA offerings are being provided to a wide spectrum of business models ranging right from technology to working capital loans and even vehicle loans for the business. One of the major advantages of the MUDRA scheme initiated by the government is the no collateral loan hence engaging a vast number of entrepreneurs in this scheme.
Types of MUDRA loans available to borrowers
While there is no minimum amount for the requirement of a MUDRA loan, the maximum amount of loan one can avail is Rs. 10 Lakh. The MUDRA scheme is essentially divided into three categories of loan. Depending on the requirement of the loan and the amount required by the borrower, the borrower can avail the type of loan that fits their category. The 3 types of MUDRA loans are
- Shishu: covering loans up to 50,000/- This loan is provided to those entrepreneurs who are in the initial stages of their business and need to seed money to kick start their plan and execution.
- Kishor: covering loans above 50,000/- and up to 5 lakh – A Kishor loan is taken up by borrowers who are already in the execution of their business plan and require additional capital for growth or expansion. The capital from this loan is usually taken to expand operations.
- Tarun: covering loans above 5 lakh and up to 10 lakh – A Tarun loan can only be taken by certain borrowers who meet the demands and eligibility criteria for a Tarun Loan.
The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth/development and funding needs of the beneficiary micro unit or small and medium entrepreneur and also provide a reference point for the next phase of graduation/growth to look forward to. Within the framework and overall objective of development and growth of micro-enterprises sector under Shishu, Kishor, and Tarun, the products being offered by MUDRA are so designed, to meet requirements of different sectors/business activities as well as business/entrepreneur segments.
Eligibility Criteria for MUDRA Loans in India
Along with general eligibility criteria that need to be met, there are also eligibility criteria under each type of loan i.e. Shishu, Kishor, and Tarun that needs to be met in order to avail that loan.
PMMY has an illustrative list of activities that can be covered under Mudra loans. Micro, small and medium businesses in these sectors meet the Mudra loan eligibility requirements and can apply for Mudra loans.
| Sector | Activities Covered Under Mudra Loans |
| Agriculture | Start, establish or expand an agriculture-allied business such as an apiary, a poultry farm, a pisciculture business, a dairy farm, a livestock farm, etc. |
| Food | Purchase of machinery or set up of business in making papad, jam, and jellies, biscuit and bread, or selling of fruits and vegetables, etc. |
| Service | Set up a salon, boutique, chemist shop, dry cleaning, photocopying facility, etc. |
| Textile | Artisans who want to start, establish or expand a business in chikan work, zari work, embroidery, stitching, knitting, etc. |
| Transport | Purchase of vehicles for the carriage of passengers or goods such as e-rickshaw, small goods transport vehicle, taxi, autorickshaw, etc. |
The eligibility that needs to be met by each of the loan categories are as follows
1) Shishu – Loan up to Rs. 50,000
– Machinery quotation and other items to be purchased.
– Details of the machinery to be purchased.
– Borrowers also have to provide details of the machinery supplier.
2) Kishor – Loan up to Rs. 5 lakh
– Last 6 months of account statements from an existing banker, if any.
– Balance sheet for the last 2 years.
– Income/sales tax returns.
– Estimated balance sheet for 1 year or for the duration of the loan.
– Memorandum and articles of association, if any.
– Sales made before filing the loan application and in the current FY.
– Borrowers also have to provide a report containing the economic and technical viability of the business.
3) Tarun – Loan up to Rs. 10 lakh
– Last 6 months of account statements from an existing banker, if any.
– Balance sheet for the last 2 years.
– Income/sales tax returns.
– Estimated balance sheet for 1 year or for the duration of the loan.
– Memorandum and articles of association, if any.
– Sales made before filing the loan application and in the current FY.
– Borrowers also have to provide a report containing the economic and technical viability of the business.
These criteria’s are the same as the criteria required for Kishor but along with that there are a few more criteria’s that need to be fulfilled to avail the Tarun loan which are
In addition to the above, borrows also have to provide:
– Certificate of SC, ST, OBC, etc.
– Address proof
– Identity proof
The bank will approve the loan only if the business idea appears profitable to them after the applicant meets all Mudra loan eligibility criteria. Similarly, if an established business needs to apply for a Kishor loan, present documents showing the current position of the company must be submitted to avail the Mudra loan. The documents are just one part of Mudra loan eligibility requirements as the banks have to be sure about the business prospects before they approve the loan.
To know more about the documents required to avail the MUDRA loan follow this link that covers all the documents and procedure for the MUDRA loan application forms.