How to avail of Mudra Bank Loans

Mudra Bank Loans

MUDRA or Micro Units Development & Refinance Agency Ltd, was announced by finance minister Arun Jaitley in his budget speech in 2015. It is important to note that MUDRA is a refinance agency which provides support to Non-corporate Small Business Sector via intermediaries such as Microfinance Institutions (MFIs), banks and non-banking financial companies. Mudra Bank Loans are typically aimed at non-farm sectors such as processing, service and manufacturing sector. 

Benefits of Mudra Bank Loans

According to reports, with the avowed pursuit of ‘Funding the Unfunded’, Mudra loans are aimed at offering finance support to over 58 million owners of small business units (according to NSSO Survey, India has around 5.77 crore small business units) who reportedly belong to the less privileged segments in the country. Mudra Bank has been allotted a corpus of over Rs.20,000 crores. Under the scheme, several measures are set to be introduced such as a standard accreditation and performance rating system of Micro Finance Institutions, effective last-mile delivery system of credit in addition to Credit Guarantee scheme among others for greater transparency, regulation and giving a fillip to entrepreneurship in rural areas across the length and breadth of the country.

Progress of Pradhan Mantri MUDRA Yojana

The table below shows the progress of the Pradhan Mantri MUDRA Yojana* in the state of Telangana as on January 15, 2016

Kishore (Disbursed amount in crores)	Shishu (Disbursed amount in crores)	Tarun (Disbursed amount in crores)	Total number of sanctions	Total disbursed amount in crores
1356.95	463.94	585.40	289624	2406.2

* Based on data submitted by various banks on the official portal

Eligibility criteria for Mudra Loans

Indian citizens with detailed project reports/business plans of non-farm income activities such as processing, manufacturing or trading with a credit requirement of under Rs.10 lakh can go to any bank, NBFCs and MFIs for availing of Mudra loans. The interest rates for Mudra Bank Loans are deregulated and based on RBI guidelines which are issued on a regular basis. It is important to note that the repayment terms under Mudra Yojana depend on the cash flow.

Documents required for availing Mudra Bank Loans

The documents required for availing of Mudra Bank loans are listed in the table below:

Document	Proof
Proof of residence	Telephone bill Property tax receipt Voter ID card Passport Aadhar Card
Proof of Identity	Driving License PAN Card
Proof of Minority/SC/OBT/ST	-
Address proof of Business Enterprise	Registration certificates Licenses Ownership related documents
Statement of accounts	-
Sales tax return (Rs.2 lakh and above)	-
Balance sheets (last 2 years)	-
Projected balance sheets (for working capital needs)	-
Project report	-
Partnership Deed	-
Asset and Liability statement	-
Photographs of Directors/Partners	-