India is a country where small businesses and self-employment are not only the basis of people’s livelihood, but also the backbone of the economy. In villages and small towns, you will find small shops, hawkers, people doing sewing-embroidery work, or people running small industries on every street corner. These people work very hard, but often they do not have enough capital to expand their work. To meet this need, the Government of India has launched the Pradhan Mantri Mudra Yojana (PMMY). This scheme is like a boon for small businessmen and entrepreneurs who want to turn their dreams into reality. Let us know in detail about this scheme, what it is, how it works, and how it can be beneficial for you.

What is the Pradhan Mantri Mudra Yojana?

Pradhan Mantri Mudra Yojana, full name of which is Pradhan Mantri Micro Units Development and Refinance Agency Yojana, was launched on 8 April 2015. Its main objective is to provide financial assistance to small and micro businesses so that they can start or improve their work. Under this scheme, the government provides loans without guarantee through banks and financial institutions. It is also called Non-Collateral Loan in English, that is, you do not need to mortgage any property to take a loan.

This scheme is specially designed for those people who want to start their business on a small scale or want to expand their existing work. Whether you are a vegetable seller, a tailor, running a small shop, or want to start a small manufacturing unit, this scheme is for you.

Three types of Mudra Yojana

Under the Mudra scheme, loans are given in three different categories, which are decided based on the need and size of the business. Their names are inspired by Indian culture:

• Shishu Loan: This is for those who are just starting their business. The maximum loan amount available in this category is up to Rs 50,000. For example, if you want to start a small grocery shop or intend to sell something on a hawker, then this loan is suitable for you.
• Kishor Loan: If your business has already started and you want to expand it a little more, then Kishor Loan is for you. You can get a loan of Rs 50,000 to Rs 5 lakh. For example, if you want to add some new machines to your tailoring shop, then this loan can be useful for you.
• Tarun Loan: This is for those who already have an established business and want to take it to a bigger level. In this category, you can get a loan of Rs 5 lakh to Rs 10 lakh. For example, if you run a small manufacturing unit and want to buy new machinery or more stock, then this loan is for you.

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Features of Mudra Yojana

The biggest feature of the Mudra scheme is that it gives loan without guarantee. That is, you do not need to provide any property or guarantor. Apart from this, there are some other special things about this scheme:

• Easy application process: Applying for a Mudra loan is very easy. You can apply by visiting your nearest bank, non-banking financial company (NBFC), or micro finance institution (MFI).
• Low interest rates: The interest rates of loans available under this scheme are lower than normal loans, which does not put much burden on small businessmen
• Flexibility: The loan amount and repayment tenure are determined by your business needs.
• Priority to women and weaker sections: In this scheme, special priority is given to women, Scheduled Caste/Tribe, and Other Backward Class people

Who can take Mudra Loan?

There are some basic eligibility conditions to avail a Mudra loan:

• The applicant must be a citizen of India.
• He should be engaged in small business, such as shop, hawker, manufacturing, service sector, or non-corporate non-agricultural activity related to agriculture.
• The age of the applicant should be more than 18 years.
• You must have a valid identity card (like Aadhaar card, Voter ID) and business related documents.

Moreover, if you are taking a Shishu loan, the documents required are very less. But for Kishor and Tarun loans, you may have to submit your business accounts, income tax returns, and other necessary documents.

How to take Mudra Loan?

The process of taking a Mudra loan is very simple. You can follow the following steps:

• Understand your needs: First, decide how much loan you need and how you will use it. For example, if you want to open a small beauty parlor, a Shishu loan may be enough.
• Choose a bank or institution: Visit your nearest bank, NBFC, or microfinance institution. Many banks, such as State Bank of India, Punjab National Bank, and others, offer loans under this scheme.
• Prepare documents: Carry documents like Aadhaar card, PAN card, residence proof, business details, and bank statements.
• Fill the application: Take the Mudra loan application form from the bank or institution and fill it correctly. If you have any difficulty in understanding, the bank staff can help you
• Loan approval: After submitting the application, the bank will check your documents and approve the loan. This process usually takes a few days to a week or two.

Impact of Mudra Yojana

Mudra Yojana has changed the lives of millions of people in the last few years. Especially in rural and small towns, where people have limited access to big banks, this scheme has given new hope to small businessmen. For example, Radha Devi from a small village in Uttar Pradesh started her tailoring shop by taking a Shishu loan. Today she is not only managing her family expenses but is also providing employment to two other women. According to data, more than 40 crore loans have been sanctioned under this scheme till 2023, a large part of which has been given to women and weaker sections. This scheme is not only promoting economic growth but also encouraging social inclusion.

Some precautions

Though Mudra Yojana is very beneficial, there are a few things to keep in mind:

• Before taking a loan, check your repayment capacity. Taking too much loan can cause problems in repayment.
• Take loans only from trusted banks or institutions. Avoid any fake agents or middlemen.
• Use the loan only for business purposes and not for personal expenses

conclusion

Pradhan Mantri Mudra Yojana is a golden opportunity for millions of Indians who want to make their small dreams big. This scheme not only provides financial assistance, but also promotes self-reliance and self-employment. If you too are dreaming of starting or expanding your business, then definitely take advantage of this scheme. Go to your nearest bank, get information, and turn your dreams into reality. Mudra Yojana can become your companion in this journey of self-reliant India.