How to apply for Pradhan Mantri MUDRA Yojana (PMMY) business loan scheme


Want to know what is the eligibility criteria for the Pradhan Mantri MUDRA Yojana bank loan scheme? This article provides complete information on the PMMY eligibility requirements, as also the types of MUDRA finance loans being offered, contact details, etc.

The Pradhan Mantri MUDRA Yojana (PMMY) has been launched by the Govt. of India to provide funding for micro entrepreneurs. The full form of MUDRA is Micro Units Development & Refinance Agency Ltd. This organization will offer financial support to the Non-Corporate Small Business Sector (known as NCSBS). With this goal, initially MUDRA has been set up as a subsidiary of SIDBI. Refinancing will be offered to non-financing companies which provide finance to small banks, regional rural banks, co-operative societies and similar entities that offer loans to trading, manufacturing & servicing micro units & small businesses.

Types of MUDRA Schemes

There are 3 schemes being offered under the PMMY:
  1. Tarun Loan: This is offered to cover loans from 5lakh to 10 lakh
  2. Kishor Loan: This is offered to cover loans from Rs.50,00 up to 5lakh
  3. Shishu Loan: This is offered to cover loans up to Rs.50,000

The government will direct 60% to units for the Shishu loan category and the remaining 40% to the other two categories.

The following are the various MUDRA products to meet the requirements of varied businesses:
  • Sector / activity specific schemes
  • Micro Credit Scheme (MCS)
  • Refinance Scheme for Regional Rural Banks (RRBs) / Scheduled Co-operative Banks
  • Mahila Uddyami Scheme
  • Business Loan for Traders & Shopkeepers
  • Missing Middle Credit Scheme
  • Equipment Finance for Micro Units

Types of firms which can apply

Any type of firm, whether proprietorship or partnership, which comes in the purview of being a non-corporate small business segment (NCSBS) can avail of the scheme. The NCSBS can be in a rural or urban area. Thus, the NCSBS could be:
  • A service sector unit
  • A manufacturing unit
  • A food service / food processing unit
  • A small industrial unit
  • A fruit or vegetable vendor
  • A shopkeeper (you can even avail of the scheme if you wish to open a franchise outlet)
  • A truck operator
  • An artisan
  • A woman entrepreneur can also avail of the scheme under the Mahila Uddyami Scheme. Under this scheme, which is part of MUDRA, the woman entrepreneur can apply for financial assistance under all 3 MUDRA loan categories, Tarun, Kishor or Sishu.




Eligibility criteria for MUDRA

The following are the eligibility criteria for the partner lending institutions for the purpose of availing refinance/ finance for lending to micro units in manufacturing, trading and service sector in rural and urban areas.

For Scheduled Commercial Banks

  1. You should be a scheduled commercial Banks in public / private sector with 3 years of continuous profit track record.
  2. Your net NPAs should not exceed 3%, the minimum net worth of Rs.100 cr. and not less than 9% CRAR.

For Regional Rural Banks

You should be a regional rural bank having net NPA within 3% (this may be relaxed in deserving cases), having operations that are profitable & not carrying any accumulated losses and CRAR greater than 9%.

MFI / SMALL BUSINESS FINANCE COMPANIES/NBFC

  1. You should have lending to a micro unit with loan size up to Rs.10 lakh for a minimum of 3 years, with the unit's promoters / management having experience of minimum 10 years in that areas.
  2. You should have a minimum out reach of 3000 existing borrowers for MFIs.
  3. You should have proper requisite auditing, risk management, cash management, MIS and other processes in place.
  4. You should have met the minimum CRAR and other norms stipulated by RBI for MFIs registered as NBFC-MFIs be compliant with existing guidelines issued by RBI.
  5. You should be a member of a Credit Bureau.

A. Rating requirements are as follows:
  • For MFIs (including NBFC-MFIs): minimum Capacity Assessment Rating of mfr5 by CRISIL or its equivalent.
  • For NBFCs: minimum external rating of BB- for small NBFCs having total portfolio below Rs. 500 crore and minimum external rating of BBB+ for NBFCs having portfolio of Rs. 500 crore or more.
  • For small NBFCs not having external credit rating, they should possess satisfactory borrowing arrangements with any Scheduled Commercial Bank for a minimum of 2 years.

B. Recovery performance requirements are as follows:
  • For MFIs: Portfolio at Risk (i.e. overdue more than 30 days) within 5%. An MFI should also have undergone the Code of Conduct Assessment (COCA) with a minimum score of 60 or equivalent.
  • For others - Net NPA not higher than 3%.

Important parameters which will determine the assistance for all

  1. An internal credit appraisal process by MUDRA / SIDBI.
  2. Risk assessment, geographical distribution, social parameters, etc.
  3. The Board of MUDRA will fix prudential ceilings for lending to various categories of borrowers. It will also fix the limits for an individual borrower / a group of borrowers as per existing RBI instructions.
  4. The detailed terms of assistance would be laid down in the loan agreement to be executed with the individual intermediary.

Complete details of eligibility requirements can be checked at: http://www.mudra.org.in/eligibility-criteria.pdf

MUDRA Card

A pre-loaded MUDRA Card will also be available to purchase equipment, raw materials and the like from registered producers or via online means. The credit limit on this card would be about 20% of the loan limit sanctioned to the enterprise, with a maximum credit limit on the card being Rs.10,000/-. The principal issuer will be MUDRA and credit risk of up to 20% of the card portfolio will be covered under the Credit Guarantee Scheme of MUDRA. The remaining risk would remain with the MFI partners.

Furthermore, a facility may be made later to link the MUDRA card with your (the borrower) Pradhan Mantri Jan Dhan Yojana Savings Account and you could even have the facility to draw the requisite amount through the Bank's ATM network for meeting the immediate liquidity problems of your micro unit.

How to apply

You simply need to contact the corporate office or get in touch with one of the MUDRA officers / nodal officers. Refer to the contact details provided below.



Contact information for MUDRA scheme

  1. Registered office:
    SIDBI
    Ground floor, Videocon Tower,
    Jhandewalan Extension,
    E-1, Rani Jhansi Road,
    New Delhi - 110055
  2. Corporate office:
    MSME Development Centre,
    C-11, G-block, Bandra-Kurla Complex,
    Bandra (East),
    Mumbai - 400 051
  3. You can also contact a MUDRA Officer or a MUDRA Nodal Officer. The list of Officers and their contact details are available at: http://www.mudra.org.in/MUDRA-OFFICERS.pdf
    MUDRA Nodal Officers' list: http://www.mudra.org.in/Nodal-Officers-MUDRA.pdf

MUDRA Official Website: http://www.mudra.org.in/


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Comments

Guest Author: sunil19 Aug 2015

Requires elgibilty of the firm means income generation to repayment of the loan/interest.

Guest Author: d.k.mandal04 Sep 2015

I want to know about the MUDRA loan - how to apply and which is are the documents required.

Guest Author: d.k.mandal04 Sep 2015

I want to know more about the unit list and type of business and documents required, as also the process for rural and urban areas, the subsidy etc.

Guest Author: varaprasad14 Sep 2015

I am self employed and need to support my family. Hence I wish to know more about this scheme.

Guest Author: Dinesh15 Sep 2015

The big truth is that no one gets MUDRA loan or card. I think the scheme is not genuine. There is no bank which is providing MUDRA loan or any information about the scheme.

Guest Author: MD RASID22 Sep 2015

I wish to apply for Shishu loan from MUDRA. How to apply for loan for Rs.50000.00? I have read the instructions and want to know which are the bank documents to be submitted?

Guest Author: Vikram Tiwari24 Sep 2015

I am from a brahmin community (marwadi) - gen category. My brother wants to apply loan under Pradhanmantri MUDRA scheme. He has just started shop and he needs loan/cc facilities.
Queries:
1. Am I eligible for this scheme?
2. If yes, how to apply or avail of loan under this scheme?
3. If no, why?

Your reply and suggestions would be helpful for us in business and knowledge.

Guest Author: Ramesh26 Sep 2015

Where to submit the application for the Mudra loan?

Guest Author: nepoleon26 Sep 2015

I am a sculptor. Am I eligible to have this loan? Which are the bank documents to be submitted? Do I need to give any experience certificate for this loan?

Guest Author: Rtikanta Dash27 Sep 2015

I am self employed and need to support my family. Hence I wish to know more about this scheme.

Guest Author: Rtikanta Dash27 Sep 2015

I am self employed and need to support my family. Hence I wish to know more about this scheme.

Guest Author: Bikask hazwari01 Oct 2015

I very very thankfull to MUDRA yojana because such yojana brings the nation on development way!

Guest Author: romeshchander02 Oct 2015

May I get Tarun or Kishor or first I should apply for Shishu loan?

Guest Author: Rinyo05 Oct 2015

I want to know about the MUDRA loan - how to apply and which is are the documents required. once on mind ,Requires elgibilty of the firm means income generation to repayment of the loan/interest.

Guest Author: prakhar06 Oct 2015

I wish to apply for Shishu loan from MUDRA. How to apply for loan for Rs.50000.00? I have read the instructions and want to know which are the bank documents to be submitted?

Author: Vandana06 Oct 2015 Member Level: Platinum   Points : 1

For any information, readers are advised to contact one of the MUDRA Officers. The list of officers and contact details (phone numbers and emails) can be checked out at: http://www.mudra.org.in/MUDRA-OFFICERS.pdf

Author: Anilkumar08 Dec 2015 Member Level: Silver   Points : 1

It was very useful information you have given about PMMY. When will the MUDRA scheme start in Karnataka?

Guest Author: sanjeev kumar21 Dec 2015

It was very useful information you have given about PMMY. When will the MUDRA scheme start in muzaffarpur bihar . we need tarun yojana

Guest Author: Neeraj kumar27 Dec 2015

I want to know about the MUDRA Yojana loan scheme. How to apply and which are the documents required?

Guest Author: Ganesh Pandulwar07 Jan 2016

Sir, I am a 24 year young businessman of all seasonable fruits. So I want to avail this Mudra Yojana loan. Which all documents are required to be submitted? Please guide me.

Guest Author: Vijay Prasad28 Jan 2016

I am self employed. I want to know about PMMY loan and the process and requirements.



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