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New Delhi | Jagran Business Office: Launched in 2015, the Pradhan Mantri Mudra Yojana (PMMY) aims to provide financial support to small and medium enterprises across the country. Under this government initiative, small businesses can avail a Mudra loan of up to Rs. 10 lakhs to meet their financial needs. According to government data, in the 7 years since its inception, loans worth Rs 18.60 lakh crore have been disbursed under the PMMY. For this, a total of over 34.42 crore loan accounts have been opened.

Types of loans under PMYY

There are three types of loans that can be used under the PMYY. They are the following:

1. Shishu: covering loans up to Rs 50,000/-

2. Kishor: covering loans above Rs 50,000/- and up to 5 lakh

3. Tarun: covering loans above Rs 5 lakh and up to Rs 10 lakh

It should be noted that while availing the Tarun loan, a processing fee of 0.50% (plus applicable taxes) of the loan amount is applicable. While no processing fees are charged in the case of Shishu loans and Kishor loans.

Eligibility criteria for loans under PMYY

Any Indian citizen who has a business plan for non-farm income generating activity such as manufacturing, processing, trading or service sector and whose credit requirement is less than Rs 10 lakh can contact a bank, an MFI or NBFC to take advantage of loans from the Micro Units Development & Refinance Agency Ltd. (MUDRA) as part of the PMMY.

Required documents

1. MUDRA loan application with self-attested proof of identity of the loan applicant and 2 passport size photographs.

2. Loan application prescribed by the lender seeking information on the applicant, past financial results and profile of the proposed activity.

3. Details of suppliers, types of machinery and other items to be purchased for the proposed activity.

4. Identity of business owner and business address.

5. Copies of licenses and certificates necessary to carry on the business or activity for which the funding is being used.

How to apply for the PMMY?

You can apply for a Mudra loan under the PMMY with the help of major banks and financial institutions. The steps to apply for Mudra loan online are mentioned below:

1. Choose the bank or financial institution from which you want to avail a Mudra loan.

2. Complete the Basic Mudra Loan Application Form by providing your personal and professional details.

3. Submit your KYC documents such as PAN card, Aadhar card or driver’s license, proof of address along with other required documents.

4. If you have an existing business, you must provide proof of business continuity and financial statements.

5. Once you submit the application form and necessary documents, the loan under the PMMY program will be sanctioned by the lender.

Posted by:
Sugandha Jha