What is MUDRA scheme under Government of India (GOI)?

1.) What does the MUDRA scheme entail?

MUDRA, which stands for Micro Units Development & Refinance Agency Ltd, is a financial institution set up by the Government of India to establish and refinance micro-unit enterprises under the auspices of Pradhan Mantri Mudra Yojana (PMMY). The Hon'ble Finance Minister announced it during the presentation of the Union Budget for 2015-16. The aim of MUDRA is to provide funding through various last-mile financial institutions, such as banks, non-banking financial institutions (NBFCs), and microfinance institutions (MFIs), to the non-corporate small business sector.

2.) Who are the objective customers of MUDRA/ What sort of borrowers are qualified for help from MUDRA?

The Non-Corporate Small Business Segment (NCSB) comprises millions of small manufacturing units, service sector units, shopkeepers, fruit/vegetable vendors, truck operators, food service units, repair shops, machine operators, small industries, craftsmen, food processors, and others in rural and urban areas.

3.) What is the rate of interest on MUDRA loans? 

The interest rates are deregulated and under the overall RBI guidelines, the banks have been advised to charge fair interest rates.

4.) Under PMMY-Shishu loans, what is the turn around time for processing the loan proposal?

For Shishu loans, the turn-around period for processing the loan proposals upon receipt of complete details is typically 7 to 10 days.

5.) I plan to operate on the model of a franchisee. Is MUDRA able to support me?

A special refinance scheme is run by MUDRA for traders and shopkeepers. As per your requirements, you can access the facilities under the scheme from any banks / MFIs / NBFCs in the region.

6.) What agencies provide loans under the Production and Refinance Agency for Micro Units?

All public sector banks, such as PSU banks, Regional Rural Banks ( RRBs), Cooperative Banks, Private Sector Banks, International Banks, Micro Finance Institutions, and Non-Banking Financial Companies, will be expanded by Pradhan Mantri Mudra Yojana (PMMY). 

7.) Who all are eligible under MUDRA?

Any Indian citizen who has a business plan for a non-farm income-generating operation such as the manufacturing, processing, trading, or service sector with a loan requirement of less than INR 1 m can, for the benefit of MUDRA loans under PMMY, approach either banks, microfinance institutions or non-banking financial companies. For the use of loans under the Pradhan Mantri Mudra Yojana (PMMY), the normal terms and conditions of the lending agency will have to be followed. As per the RBI guidelines issued from time to time in this regard, the lending rates are. 

8.) What is the usage of the Micro Units Development and Refinance Agency Card?

The MUDRA Card is a creative credit product where credit can be used freely and flexibly by the borrower. It will give the borrower a working capital agreement facility in the form of CC / OD. Since the MUDRA Card is a RuPay debit card, it can be used to collect cash from an ATM or Business Correspondent or make transactions using the machine's Point of Sale (POS). The facility is also available to repay the balance when and when there is excess cash available, thus reducing the rate of interest.

9.) What is the list of documents needed for the availing of MUDRA loans?

Application form, Address Proof, ID proof, Bank Statement of specified duration, Statutory return, and others as may be requested are the list of documents needed for the use of MUDRA loans. This is just a collection that is indicative. 

10.) What is the grievance mechanism available against bank officials, in the event of non-sanction of loan? 

Any petition against the non-consideration of the MUDRA loan can be registered with the superior authorities of the respective bank, such as the Bank's Regional Manager / Zonal Manager, given that there is a lapse in the sanctioning of the loan by bank officials.

11.) Is there any standard format of application to avail of MUDRA loans? 

A one-page application format that has been posted on the MUDRA website has been developed for the Shishu group. A 3-page indicative application format has been developed for the Kishor and Tarun categories and is also published on the MUDRA website.

12.) Is there any requirement for life insurance for the MUDRA scheme?

For loans under PMMY, life insurance is not needed.

13.) What are the various types of loan options available under Pradhan Mantri MUDRA Yojana?

The following loans are available to the qualifying company under the MUDRA scheme: Shishu: loans covering up to INR 50,000 Kishor: loans covering up to INR 50,000 and up to INR 5 lakh Tarun: loans covering up to INR 5 lakh and up to INR 10 lakh.

14.) What is Pradhan Mantri Mudra Yojana? 

Pradhan Mantri Mudra Yojana (PMMY) is a scheme initiated by the Honorable Prime Minister to offer non-corporate, non-famous small/micro enterprises loans of up to INR 10 Lakhs.

15.) How much interest rate is charged on a Micro Units Development and Refinance Agency (MUDRA) loan?

The interest rates are deregulated and, under the overall RBI guidelines, the banks have been advised to charge fair interest rates.

16.) I want to start my own business. Can Micro Units Development and Refinance Agency help me?

The Production and Refinance Micro Units Agency (MUDRA) provides non-corporate, non-farm, small/micro enterprises ( SMEs) with loans up to INR10 Lakhs. Business banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs, and NBFC offer these loans.

17.) What is the application form to apply for a MUDRA loan?

Shishu: Covering loans of up to 50,000 INR

Kishor: Loans over INR 50,000 and up to INR 500,000 secured

Tarun: covering loans above INR 500,000 up to INR 1 m Note: MUDRA is not a direct lending entity but a refinance agency. MUDRA provides its intermediaries with refinancing assistance, i.e. Banks, microfinance institutions, and non-banking financial companies which are expanding these loans further to Entrepreneurs/businesses.

18.) Can Micro Units Development and Refinance Agency provide loans for running a franchise?

A special refinance agency for traders and shopkeepers is run by the MUDRA Scheme. You can access the facilities under the Scheme from any bank/microfinance institution / non-banking financial companies in your region as per your requirements.

19.) Which banks are eligible to provide Micro Units Development and Refinance Agency loans?

Under Pradhan Mantri Mudra Yojana (PMMY), all public sector banks (PSB), regional rural banks (RRB), and scheduled cooperative banks are permitted to cover all loans up to INR 10 lakhs, approved on or after 8 April 2015.

20.)  What is the grievance component accessible against bank authorities, in case of non-endorsement of advance? 

Any grievance against the non-consideration of the MUDRA loan can be registered with the superior authorities of the respective bank, such as the Bank's Regional Manager / Zonal Manager, given that the loan is approved by the bank officials,