How to Apply for Bank Loan under Mudra Yojana?
How to Apply for Bank Loan under Mudra Yojana in India

How to Apply for Bank Loan under Mudra Yojana in India

Updated on 21 May, 2020

Do you want to start a new business but short of funds?

You can now start a business without worrying about funds or high-interest loans because of the Indian govt. is providing loans for MSMEs (Micro, Small and Medium Enterprises) at low-interest rates.

Let’s dig deep into MUDRA Yojana.

What is Pradhan Mantri MUDRA Yojana?

Pradhan Mantri MUDRA Yojana (PMMY) is a government initiative to provide loans up to 10 lakh to the non-corporate, non-farm small or micro-enterprises. These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.  You can approach any of the lending institutions mentioned for the MUDRA loan. You can also apply it online through www.udyamimitra.in.

Main features of PMMY

  • No collateral security is required.
  • No loan processing fee.
  • Repayment of a loan in a maximum period extended up to 5 years.
  • Working capital loans will be given through MUDRA cards.

What is the main objective of the MUDRA Yojana?

Main objective of PMMY is to promote entrepreneurship among the new generation aspiring youth. Other key objectives are-

  • Helping the small businesses to grow in India
  • Easy access to finance and lowering the cost of finance
  • Lending preference to SC/ST and minorities
  • Assisting lower-income groups in expanding their business

Types of Loans under Mudra Yojana

Under Mudra Yojana, three types of loans are offered:

  • Shishu: covers loans up to Rs. 50,000
  • Kishor: provides loans above Rs. 50,000 and up to Rs. 5 lakh
  • Tarun: covering loans above Rs. 5 lakh to Rs. 10 lakh

How to Apply for Bank Loan under Mudra Yojana in India

Source: Mudra.org.in

Read Also – Best Personal loans in India

Who are eligible to avail loans under Mudra Yojana?

Any Indian Citizen who has a business plan or extension plans for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than Rs.10 lakh can approach either a Bank, MFI, or NBFC for availing collateral-free loans under Pradhan Mantri Mudra Yojana (PMMY).

The applicant should not be a defaulter of any banks, NBFCs or Financial Institutions to avail loan under any Mudra category (Shishu, Kishor or Tarun).

Purpose of Mudra Loan Yojana

Mudra loan caters a variety of purposes resulting in not only income generation but employment creation also. The loans handle the following purposes:

  • Business loan for Vendors, Traders, Shopkeepers and other Service Sector activities
  • A working capital loan through MUDRA Cards
  • Equipment Finance for Micro Units to set up machinery.
  • Transport Vehicle loans (including car loan) – for commercial use only.
  • Loans for agri-allied non-farm income-generating activities, e.g. pisciculture. beekeeping, poultry farming, and many more.
  • Tractors, tillers as well as two-wheelers used for commercial purposes only.

Mudra Cards are issued by the Banks either directly or in association with MFIs. Mudra cards are basically RuPay Debit Card
You can withdraw cash from any ATM or purchases can be made either online or at POS machines like any normal debit card.

Mudra Yojana Rupay Debit Card

Sectors covered under MUDRA loans:

1) Transport Vehicle
Loan to purchase of transport vehicles for transportation of goods and passengers such as auto-rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, and taxis.

Tractors/Tractor Trolleys/Power Tillers used only for commercial purposes are also eligible for assistance under PMMY.

Two Wheelers used for commercial purposes are also eligible for coverage under PMMY.

2) Community, Social & Personal Service Activities
You can get Mudra loans for salons, beauty parlors, gyms, boutiques, dry cleaning, cycle or motorcycle repair shops, Printing Press and Photocopying Facilities, Medicine Shops, Courier Agents, and similar services.

3) Food Products Sector
Mudra loan covers papad making, achaar making, jam/jelly making, agricultural produce preservation at the rural level, sweet shops, small eating joints and day to day catering/canteen services, cold chain vehicles, cold storages, ice and ice cream making units, and bakery units.

4) Textile Products Sector
Handloom, khadi activity, embroidery work (chikan work, zari and zardozi work, traditional embroidery and hand work), traditional cloth dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non-garment products such as bags, vehicle accessories, and furnishing accessories.

5) Business loans for Traders and Shopkeepers

Lending support to individuals for running their shops and business activities or service enterprises and non-farm income-generating activities with a beneficiary loan size of up to 10 lakh per enterprise.

6) Equipment Finance Scheme for Micro Units

Setting up micro-enterprises by purchasing necessary machinery or different types of equipment up to 10 lakh as a loan amount.

7) Activities allied to agriculture

‘Activities allied to agriculture’ are pisciculture, beekeeping, poultry, livestock-rearing, grading, sorting, aggregation agro industries, diary, fishery, agri-clinics, and agribusiness centers, food & agro-processing and services supporting these, which promote livelihood are eligible for coverage under PMMY.

PMMY doesn’t cover crop loans, loans for land improvements such as canal, irrigation, and wells.

Mudra Loans Interest Rates

The interest rates on loans will be 1% per month i.e. 12% per annum. Some interest rate examples with tenures are-

BankInterest rateTenure
Bank of Baroda8.40% to 9.25%1-3 years
Bank of Maharashtra10.35% onwards1-3 years
Bank of India8.35% onwards1-3 years
UCO Bank8.85% to 10.85%4-5 years
Union Bank of India8.75% to 10.00%1-5 years
HDFCAs per bank guidelines1-5 years
ICICI BankAs per bank guidelines1-5 years
Allahabad BankAs per bank guidelines1-5 years
Canara BankAs per bank guidelines1-3 years
Central BankAs per bank guidelines1-3 years
IDBI BankAs per bank guidelines1-5 years
Oriental Bank of CommerceAs per bank guidelines1-5 years
State Bank of IndiaAs per bank guidelines1-5 years

How to Apply for Bank Loan under Mudra Yojana in India

You can approach any of the lending institutions mentioned for the MUDRA loan. You can also apply both online and offline.

#1. How to Apply for Mudra Loan Online

Step 1: Visit www.mudramitra.in  and click on ‘Login’ Menu on the right corner of webpage and click on ‘Applicant’. (You can also apply the same procedure at www.udyamimitra.in)

How to Apply for Bank Loan under Mudra Yojana in India

Step 2: From now onwards, you have to complete a 4-step procedure to apply for Mudra loan (as shown in image below). Click on ‘New User’ to register a user id for Mudra loan application.

How to Apply for Bank Loan under Mudra Yojana in India

i) Enter the loan amount and select scheme under which you are going to get loan. (Without entering loan amount, scheme will not be visible)

How to Apply for Bank Loan under Mudra Yojana in India

If you still not clear about the scheme you can click on the ‘Assess your Scheme Suitability’ button and get details about scheme.

How to Apply for Bank Loan under Mudra Yojana in India

ii) Fill the details as shown above and you will be able to calculate about which category scheme and in which range you are eligible for the loan.

Step 3: Login to Mudra Loan Portal. Password will be sent to your registered email id. You can change your password on first login attempt. Once logged in, you can ‘Select Handholding Agency’ that will guide you for the loan related processes.

How to Apply for Bank Loan under Mudra Yojana in India

A Hand holding agency help borrowers in completing lending process. Apart from linking prospective borrowers to banks for loans, they also
provide support through training, skill development, mentoring, project report preparation to help entrepreneurs set up his business.

Step 4: Click on ‘Fill Application Form & Apply’ button as shown in the above image. Fill the application form and click on ‘Next’. You have to complete 6 different pages of the application form to complete the process.

How to Apply for Bank Loan under Mudra Yojana in India

After completion of application process, you will be redirected to a new page where you can fill details of the lending institution and complete the application process.

You can take print out of the form for further use.

#2. How to Apply for Mudra Loan Offline

In offline mode, loans under Mudra Yojana are offered by:

  • 27 Public Sector Banks
  • 17 Private Sector Banks
  • 31 Regional Rural Banks
  • 4 Co-operative banks
  • 36 Microfinance Institutions
  • 25 Non-Banking Financial Institutions

You can reach out any public sector bank or institution metioned in above list to get Mudra loan.

Application form for Shishu Loan under Mudra Yojana

At least 60% of the loans under Mudra Yojana are applied under Shishu Category and the remaining 40% is to be awarded under Kishore and Tarun Catergories.

Application form for Shishu Loan looks like the image below.

Application form for Shishu Loan under Mudra Yojana

What Documents are Required for Mudra Loan (Shishu/Kishore/Tarun)

You require the following documents to be submitted along with the MUDRA loan application form:

  • Proof of Identity: Self-attested copy of Voter ID card/driving license / PAN card / Aadhar card / Passport / Photo ID issued by Govt. authority.
  • Proof of Residence: Recent telephone bill / electricity bill / Property tax receipt (not older than 2 months) / Voter ID card / Aadhar card / Passport / Bank statement duly attested by Bank Official.
  • Loan applicants recent Passport size Photographs (2 copies).
  • Quotation of Machinery / other items to be purchased (if any).
  • Name of supplier/details of machinery/price of machinery and/or items to be purchased.
  • Proof of Identity / Address of Business Enterprise – Copies of relevant Licenses / Registration Certificates / other documents pertaining to the ownership identity and address of the business unit (if any).
  • Proof of category like SC / ST / OBC / Minority (if applicable).

Where to approach for help regarding Mudra Loan

Visit the local branch of the public sector banks in your region (or other financial institutions that I mentioned earlier) for help related to Mudra Yojana. You can also register on the Mudra website and seek guidance from the hand-holding agency.

You can approach to the Nodal Officers at various SIDBI Regional offices/Branch Offices who are referred to as first contact persons for loans under MUDRA Yojana.

The borrower may also visit MUDRA website, mudra.org.in and can email any query or suggestion to help@mudra.org.in

Conclusion

I have tried to cover all the major aspects of Mudra Yojana along with the online application process in a step by step manner. Tell me your thoughts or queries related to Mudra Loan in the comments.

58 thoughts on “How to Apply for Bank Loan under Mudra Yojana in India”

  1. Hello sir/madam
    I am shabnam. I want 1 lakh rupees loan to start a tuitions classes to build my career. So please help me. I inform me how to get this loan. I want this loan as soon as possible. I hope you will inform me soon.
    thank you.

  2. Hello sir/madam…
    I m shabnam shaikh I saw your advertisement on TV. And I want to start a tuitions classes. So I want 1 lakh loan to build my career. So please inform me as soon as possible. And show me the way to get this loan. Thank you

  3. If bank manager says no to grant a laon then to whom we should contact?

    Kindly advise with contact no

  4. HII……. THIS IS SAYYED HEENA

    SIR ACTUALLY I SAW ON TV THAT MUDRA YOJNA PROVIDE US A LONE FOR STARTING A SMALL BUSINESS, I VISITED AT YOUR WEBSITE BUT I DID NOT GET ANY INFORMATION .. PLEASE HELP I WANTS TO START A COMPUTER CLASSES.

    THANKS
    REGARDING HEENA

  5. ?????? ?? ???? ??? ????? ???? ???? ??? ???? ???? ???? ????? ??????? ??????? ????? ?????

    ???? ? ????? ????????? ???? ????? ????? ?????? ?? ???? ???? ?? ?? ?? ?? ???? ????? ??

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    ?? ????? ???? ???? ?? ??? ?? ????? ??? ?? ???? ?? ?? ???? ???????? ?? ?? ????? ??
    ?? ?? ?? ?? ???? ????? ?????? ?? ???? id ?? ?? ???? ?? 995860995969 ????? ????????? ?? ?? UDYOG AADHAAR N0 UP12D0000027 MO 07052470148 8953352283 EMEL slavkush24@gmail.com

  6. sir i want loan iam doing bussiness ,frourmill.please give me some loaniam getting life give sir some people worked this bussiness please give loan

  7. Sir mujhe kirane ki shop kholne k liye kishor loan chahiye meri age 31yrs hai
    So please reply 9680945161

  8. Sir, i am planning to start a business, so i need mudra loan, i approached bank and submitted all my documents. Bank take 3 month for processing, the bank manager always make excuses,finally they reject my loan.how can i get the reason for rejecting my loan

  9. mohd khalid khan

    sir i want to open my own business i am B.E. graduate so plz hlp me kindly sand me the guide lines to how i get a loan to open my business.

  10. Hello sir , I need a loan to extend my business how can i get this loan under this yojna plz help me

  11. Sir, I want to start up a Hotel. Will it be covered under under Mudra Yojana Scheme.

  12. Prashant Panchal

    Dear Sir,

    I want loan for start my workshop can u help me how to get loan from bank and what kind of document required for loan.

  13. I want to require loan please sir how to apply the application for the loan..

  14. Sir I want loan for start my bussnes plz help me. How I received this loan amount

  15. sir i want loan iam doing bussiness and sales purchase powder mirchi chilles please give me some loaniam getting life give sir some people worked this bussiness please give loan

  16. Sir bank wale loan Nahi De rahe Hai bolte Hai kota pura ho gya Hai. Koi upay btaye mujhe business ke liye loan chahiye

    1. Dear this is wrong there is no quota system in mudra. this scheme will continue.

      Suman kumar

      MD Brilliant educational academy delhi

  17. Sir mujhe home loan chahiye is ka procedure kya hai pls hamein bataiye…don’t be take light pls

      1. Hat bank ka procedure lag bag ek he hai. Rate of interest thoda farak rahega . Aapka eligibility pata karnekeleye koi bi Nazdeek branch pe jaayiye. Bank samne se batayega

  18. Saurabh Tiwary

    Hello, I am planning to extend my computer education class having 15 students that I am runnig in my village for last 1 year. Howeever, due to lack of computers I am unable to provide enough practical to students.
    However,I am looking for some help through Mudra bank if I can get around 1 to 1.5 lacs to buy 6 computers to extend my institution . May I get laon under kishore scheme?

  19. kirana dukan ke liye loan chahiye 10,00000 )-dhirendra kumarkasaudhan vikalag 80/ narendra modi jee we bahut gareeb he atah hamaree madad kare aap ka jiwan bher aap ka abharee rahuga .our -mo.no-8115492620

  20. shrikant j. bhosale

    hi
    mujhe 2 wheeler garaj chalu karna he . kya mujhe is suvidha ka labh mil sakta he ?

  21. Laleshwar prasad

    sir ji mujhe apni busness badhane ke ley mudra loan ki jarurat hai is ley mujhe mudra loan ka detail de

  22. I want to start small business .so i vist for mudra lone but they dont respon for my plane . You say what i do ,
    Dear sir your project not work in bihar plzzz do for best way for us. We want some spacle for your statw our contry we need our help plzzz help us..
    Mob- 9507967768

  23. i went to bank and asked about mudra loan. manager were basted he don’t give the information. stupid plan…….

  24. muje bissnesh ke leye 5 lakh ka loan chahiye plz healp me me filal travels kabissnesh karta hu comition bash pe

  25. Mai bank gaya to manager ne mudra lone dene ke liye mana kar diya ,hum logo ko bewakuf banaya ja raha hai. Sir
    Aap bataye kya kare.

  26. I’m an unemployed educated youth with energetic scope.I still haven’t registered for my trade license.hoping to get it. I need 5 to 10 lakhs to open a parts and accessories shop for cars and vehicles.can you please help me?I’ve an IDBI bank account.

  27. Dear Sir
    I want guidance to get loan from through andhra bank on taking category 5 to 10 lakhs for service oriented business. Please give your reply for how to approach.

    Thanks and regards
    M.Ashok

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