PM MUDRA loan and its benefits. How do apply for an SBI e-Mudra loan? MUDRA gives support to micro and small business enterprises to start a business.
Mudra Or Micro Unit Development and Refinance Agency provides refinance to Banks/MFIs/NBFCs for lending to support the business needs of micro-units with loan requirements upto ₹10 lakhs. The business loans provided under Mudra Yojana are known as Mudra Loans. A Mudra loan can also be taken by enterprises online through a bank website and is known as an e-Mudra loan.
If you are planning to start your own business you might need funds. If you already have the budget, that’s great. If you don’t, what would you do? How would you arrange the required funds?
Going to a local money lender may cost you a lot. They would charge you hefty interest. Starting a new business with a heavy burden is not a good idea.
Well, the Good news is that you have an option. Whether you are a fresh entrepreneur or experienced in the field, or if you are self-employed, you may choose a business loan under Pradhan Mantri Mudra Yojana (PMMY).
What is PMMY?
Pradhan Mantri Mudra Yojana (PMMY) scheme is launched by our honourable Prime Minister on 8th April 2015. Its main objective is to provide loans up to ₹10 lacs to non-corporate, non-farm small and micro-enterprises.
The facilities are available in all commercial banks, regional rural banks, small finance banks, MFIs and NBFCs.
All about MUDRA
MUDRA stands for micro-units development and refinances agency bank. It can be applied by the business owner whose age is in the range of 18 to 65 years.
Its vision is to create an inclusive, sustainable and value-based entrepreneurial culture toward financial stability and economic growth.
In the last financial year 2020-21, about 43.37 lacs of proposals were sanctioned under the scheme. A whooping ₹279482 crores of funds were sanctioned to the applicants. This financial year it is expected to grow even further and the government is trying to stabilise the MSME sector which contributes a lot to our Country’s economic growth.
A Mudra loan is a collateral-free loan without any processing charge. Other than that, the interest rate applicable is quite low as it is linked with MCLR which is calculated as per RBI.
There are three types of loans under the scheme. These are
Let’s find out how it differs from one another. Also, let’s see how one can get the benefits.
All micro and small business enterprises can avail of the facility. The loan amount is capped at ₹50000. The business owner has to be in the initial stage or to start a new business which can be done with ₹50000.
Under the Kishore mudra scheme, those business owners who are looking to expand their business can apply. The loan amount is capped at a maximum of ₹5 lacs.
Tarun offers loans up to ₹10 lacs. On top of normal eligibility criteria, the borrower needs to meet certain business criteria to avail of the Mudra Tarun scheme.
So, it’s clear that PMMY promotes and ensures small business owners start and expand their businesses and grow exponentially.
A whole bunch of financial services and facilities are made accessible to these micro and small enterprises through MUDRA and its partnered agencies.
Benefits of MUDRA loans
It offers a range of benefits that a business owner can get. Below are the few benefits PM Mudra loan offers
MUDRA gives support to micro and small business enterprises to start a business and guides them along the way in expanding their business growth with its three schemes Shishu, Kishore and Tarun.
You can also get the benefit of an Overdraft facility with a Mudra Card. It is a card that offers cash credit services and also acts as a debit card. Mudra Cards can be swiped at Points of Sale (PoS) with merchants or to withdraw cash from an ATM.
It offers credit facilities to MSMEs that are engaged in income generation.
There’s no security or collateral required for availing of the loan. The loan is covered under CGFMU (Credit guarantee fund for micro-units)
No processing charges at all.
SBI Mudra Loan can be taken for business expansion, modernization of business, purchasing equipment etc. Also, as part of the scheme, there is a separate provision for purchasing the inventory for expanding their business. Freedom to use the allocated funds as per business requirements.
Special concession to women borrowers:
Under Mahila Uddyami Yojana, the government encourages women to start their enterprises. Therefore, she can avail SBI Mudra loan at a discounted rate.
Interest rates are fixed by RBI as per the Marginal cost of lending rate (MCLR). The rate of Interest on Mudra Loans is determined as per the RBI guidelines are thus lower than regular business loans.
Who can apply
Let’s see which types of business owners can apply for a Mudra loan. Good thing is, a Mudra loan can be applied for new businesses as well as for existing businesses.
- All non-farm enterprises/ micro and small business enterprises where the fund requirement is upto ₹10 lacs can avail of the loan.
- Businesses engaged in small-scale manufacturing.
- Businesses engaged in trading and services.
- Fast food chains and food production are small industries.
- Allied agricultural activities like pig and goat rearing.
- Repair and restoration shops and self-employed entrepreneurs.
How to apply
Mudra loans can be applied for online as well as by visiting the bank. To apply online one has to go to the bank’s official website.
For the offline process, one has to download the application form and submit it to your desired bank. The application form can be downloaded from the official website or you can get it from your bank.
Documents Required for SBI Mudra Loan
The following documents have to be submitted for Shishu, Kishor, or a Tarun loan scheme:
- Duly filled application form with passport-sized photographs
- ID Proof: Passport, voter’s ID card, driving license, PAN Card, Aadhaar Card
- Residence Proof: Recent telephone or electricity bill, Voter’s ID card, Aadhaar Card, Passport
- Income Proof: Last 6 months’ bank statement
- Proof of belonging to SC/ST, OBC, or any minority group, if applicable
- Any other document required by SBI
To promote small enterprises in India, the government of India introduced Prime Minister Mudra Yojna in the year 2015. Under this scheme, business loans can be availed up to ₹ 10 Lakh by non-corporate,non-farm and micro-enterprises. These loans are known as mudra loans and can be availed through any bank; rural banks, small banks, commercial banks or non-banking finance institutions.
State Bank of India, which is one of the largest public sector banks in India, also provides Mudra Loan to Micro, Small & Medium Enterprises (MSMEs). SBI e-mudra loans can be availed to meet various business requirements, such as business expansion, modernization, buying machinery, and other business-related purposes.
Mudra Loan can be availed by Non-Corporate Small Business Segment comprising small manufacturing units, service sector units, shopkeepers, vendors, repair shops, artisans etc. through SBI Bank. If you have SBI Savings and Current accounts you can also apply for the SBI Mudra loan of upto ₹ 1 Lakh online through the SBI e-Mudra portal.
SBI e-MUDRA Loan – Features & Eligibility Criteria
A maximum of ₹1 lac can be applied under the scheme. The loan will be running for 5 years. Processing of loans will be purely online OTP based through Adhaar number (eKYC).
Upto ₹50000 there will be instant disbursal of the loan and if the loan amount is beyond that, one needs to visit the branch and complete the formalities to avail of the benefits.
Overall, the PM Mudra loan scheme is a revolution for non-corporates, and non-farm micro and small enterprises. A budding business owner can really make a difference if he is into it.
A good loan product for a better country with a promising future for everyone in the small business community.
Steps to Apply for SBI e-Mudra Loan
Existing customers sharing relationships with SBI in the form of a Savings Account or Current Account (Individual) can apply for an e-MUDRA loan of amount Up to Rs. 1,00,000 by visiting the SBI e-mudra portal and following the below-mentioned steps:
Step 1: Select Pradhan Mantri Mudra Yojana Application Form from the drop-down menu.
Step 2: Visit the SBI official website https://emudra.sbi.co.in:8044/emudra and click on ‘Proceed’.
Step 3: Provide the required details like the applicant’s Aadhar card for e-KYC purposes through UIDAI, as the e-KYC and e-sign need to be completed through OTP authentication for loan processing and disbursement.
Step 4: Once the SBI formalities and loan process is completed, the applicant shall receive an SMS that will state to initiate the further process by revisiting the e-MUDRA portal.
Step 5: This process needs to be completed within 30 days after the receipt of the SMS of loan sanction.
Note: The applicant needs to upload the document in JPEG, PDF, or PNG format only, with a maximum file size of 2 MB.
Documents required for SBI e-Mudra Loan
To apply for a Mudra loan from SBI, you are required to submit the following documents, along with the loan application form:
- Duly filled application form with passport-sized photographs
- KYC documents of the applicant: Passport, Voter’s ID card, Aadhar Card, Driving License, PAN card
- Details of Savings/Current Account number and branch
- Proof of Business (Name, Start date & Address)
- UIDAI- Aadhar Number (should be updated in Account Number)
- Community details (General/ SC/ ST/ OBC/ Minority)
- Other information for uploading like GSTN & UDYOG Aadhar
- Proof of Shop & Establishment and business registration
- Any other document required by SBI
SBI Mudra Loan Eligibility Criteria
Applicant must be engaged in a non-farm income-generating activity, either in manufacturing or in the services sector
The applicant should be residing at the same location for at least 2 years
MUDRA Yojana Loan Amount Category Loan Amount Shishu Up to Rs. 50000 Kishor Rs. 50000 – Rs. 5 lakh Tarun Rs. 5 lakh – Rs. 10 lakh
In addition to finance, MUDRA also offers a credit guarantee for Mudra loans, acts as a technology enabler, and provides developmental and promotional support. The funding support is offered through four avenues:
Through a Micro Credit Scheme (MCS) for loans up to Rs. 1 lakh, where the financing comes through microfinance institutions
Using a refinance scheme for Commercial Banks, Regional Rural Banks (RRBs), and Scheduled Co-operative Banks (SCBs)
Through the women’s enterprise program