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MUDRA loan is a loan scheme for MSMEs under the PMMY scheme introduced by the Government of India. MSMEs can get loans ranging from ₹50000 to ₹10 lakh under the scheme. MUDRA loan eligibility depends on the main revenue generating activity of the business.
MUDRA loan eligibility
If you are trying to apply for the MUDRA loan you will need to satisfy all the eligibility criteria set up by the loan authority. Let us have a detailed look at all the eligibility for MUDRA loan scheme:
- Age of the applicant: The applicant must not be a minor. The age limit for MUDRA loan is from 18 to 65.
- Citizenship: The applicant must be an Indian citizen
- Credit requirement: Credit requirements should be ₹10 lakh and below
- Size of entities: The companies should be officially classified as MSME with valid MSME registration
- Loan defaults: The applicant must have no prior loan defaults
- Type of businesses: All non-corporate and non-farm enterprises including startups, wholesalers and retailers can apply for the loan. Here is a list of some of the business activities eligible for the MUDRA loan:
- Fruit and vegetable vendors
- Engineering businesses
- Services companies
- Manufacturing businesses
Mudra loan eligibility cibil score
Generally, the MUDRA loan eligibility CIBIL score that a business should possess ranges from 650 – 700. However, banks don’t consider CIBIL score as a strict determinant of eligibility.
Documents required for MUDRA loans
To apply for MUDRA loans these are the documents required:
- Udyam registration certificate
- Shop and establishment registration certificate
- Identity proof including Aadhar card and PAN card
- Income tax returns of the past six months
- Audited balance sheets and profit and loss accounts of the company
Also read: Is Udyam and MSME registration the same?
How to apply for a MUDRA loan?
Government of India invited financial institutions across the country to participate in MSME lending under the scheme. Many MFIs, NBFCs, public and private sector banks are a part of this loan scheme. Simply approach your nearest bank branch to check if they are extending the loan. You can contact them via phone as well.
Types of loans extended under MUDRA loans
- Business loan for vendors, traders, shopkeepers and other service sector activities
- Working capital loan through MUDRA cards
- Equipment finance for micro units
- Transport vehicle loans for vehicles used for commercial purposes
- Loans for agri-allied non-farm income generating activities, for example, pisciculture. bee keeping, poultry farming, etc.
- Loan for tractors, tillers and two wheelers used for commercial purposes
Which banks are eligible for issuing MUDRA loan?
Under the PMMY scheme, various financial institutions have been authorised to extend loans to MSMEs. Products like SBI e-Mudra loan have become very popular among businesses that are SBI account holders. Here is a list of banks that offer MUDRA loans for MSMEs:
|Type of financial institution
|Name of the institution
|Public sector banks
|Bank of India
|Bank of Maharashtra
|Indian Overseas Bank
|Punjab National Bank
|Private sector banks
|The Nainital Bank Limited
|Kotak Mahindra Bank
|State co-operative banks
|Andaman & Nicobar State Cooperative Bank Ltd
|Regional rural banks
|Kerala Gramin Bank
|Manipur Rural Bank
|Karnataka Gramin Bank
|Baroda UP Bank
|Micro Finance Institutions
|Agora Microfinance India Ltd
|Village Financial Services Pvt Ltd
|Muthoot Microfin Ltd
|M Power Microfinance Pvt Ltd
|Satin Creditcare Network Limited –
|Samasta Microfinance Limited
|Non Banking Financial Companies
|Magma Fincorp Limited
|Shriram Transport Finance Co.
|L&T Finance Limited
|Ess Kay Fincorp Limited
|Small Finance Banks
|Equitas Small Finance Bank
|ESAF Small Finance Bank
|Ujjivan Small Finance Bank
|Jana Small Finance Bank Limited
There are many more banks that extend MUDRA loans to small businesses. These are collateral free loans designed to provide easy access to finance to the MSME sector.
For a full list of banks offering MUDRA loans visit https://www.mudra.org.in/, navigate to offerings and click on ‘Shortlisted for partnering on MUDRA’.