As per the Economic Times, the Government of India sanctioned more than 18 Crore loans till 31st March 2019 under the Pradhan Mantri Mudra Yojana scheme. This scheme came into effect from 2015 and aimed to provide funds of up to Rs. 10 Lakh at a subsidised MUDRA loan interest rate to the non-corporate and non-farm micro and small enterprises of the country.
The motive behind this scheme is to reduce the unemployment rate of India, which is estimated to be around 31 million as of September 2018.
Given below are some of the facts that you should know before applying and taking advantage of subsidised MUDRA loan interest rates.
- Loan amount
This scheme sanctions loan amount under three categories, such as –
- Tarun – You are allowed to apply for a loan between Rs. 5 Lakh and Rs. 10 Lakh.
- Kishor – Under this category, you are allowed to avail a loan between Rs. 50,000 and Rs. 5 Lakh.
- Shishu – You can avail a loan amount of up to Rs. 50,000 under this category.
- MUDRA Yojana interest rate
The variable interest rates under this scheme are as follows –
Shishu – Avail a subsidised interest rate of up to 12% per year or 1% per month.
Kishore – Avail a subsidy depending on the interest rates of your financial institution or NBFC and your credit history. The Pradhan Mantri MUDRA Yojana interest rate will be provided following the guidelines under this scheme.
Tarun – The interest rate will depend on your financial institution and NBFC. The rate will be following the PMMY guidelines and your credit history.
Given below are some of the ways to avail the benefits of MSME loan under the PMMY scheme.
- Meet the eligibility criteria
To avail a subsidised MUDRA loan interest rate, you are required to meet the following eligibility criteria.
You are required to –
- Reside in the same locality for a continuous period of the last 2 years before the application.
- Have training under RSETI.
- Not have defaulted any payments on existing advances.
Alternatively, if you do not meet the above eligibility criteria, you can avail advances from various financial institutions and NBFCs. Bajaj Finserv is one such NBFC that provides Business Loan at an attractive interest rate against minimal documents. They also provide online account access, instant approvals, prolonged tenor, substantial loan amount, prolonged tenor and other lucrative benefits.
This NBFC also brings you pre-approved offers to reduce the hassle of the application process and to save your time. These pre-approved offers are available on several financial products such as home loans, business loans, personal loans, etc. To have a look at your pre-approved offer, you will have to provide minimal information like your name and phone number.
Provide the required documents
Given below is a list of documents that you have to submit to help your business raise finance with PMMY.
- Quotations of the items to be purchased.
- Details of the purchases.
- Income tax returns.
- Profit and loss balance statement for a minimum of the last 2 years.
- Articles and Memorandum of association.
- Sales made in the year of application.
- Identity proof like PAN, Aadhaar card, passport, voter ID, driving license, etc.
- Citizen assessment certificates such as certificate of ST, SC or OBC.
- Address proof such as electricity bills, water bills, gas bills, telephone bills, etc.
Advances availed under this scheme provides you with an end-usage restriction, and hence the amount cannot be used to serve personal purposes. You can use the amount to improve your marketing strategies, regulating working capital, purchasing and updating the required machinery, etc.
You can repay the advances availed with subsidised MUDRA loan interest rate within 5 years. Additionally, you will also be able to enjoy a moratorium of up to 6 months depending on your business domain.