Mudra Loan
MUDRA (Micro Units Development and Refinance Agency) loan is a government initiative in India aimed at providing financial support to micro-enterprises and small businesses, particularly those operated by individuals from marginalized and low-income groups.
Here's a detailed overview :
1. Eligibility Criteria :
Be a micro or small enterprise in the non-farm sector.
Have a business plan for establishing, expanding, or upgrading a business.
Be engaged in income-generating activities such as manufacturing, processing, trading, or service sectors.
2 Impact and Achievements :
Since its inception, the MUDRA Loan scheme has had a significant impact on the micro and small enterprise sector:
Millions of entrepreneurs have benefitted from the scheme, leading to job creation and economic empowerment.
It has fostered a culture of entrepreneurship, particularly among women and marginalized communities.
The scheme has contributed to the formalization of the informal sector by bringing more businesses under the banking umbrella.
Features and Benefits of Mudra Loans :
Purpose:
The loans can be used for various business activities, including working capital requirements, purchase of equipment, machinery, vehicles, etc.
Interest Rates:
The interest rates on MUDRA loans are usually competitive and vary depending on the lender and the specific terms of the loan.
Collateral:
Generally, MUDRA loans are collateral-free for loans up to Rs. 10 lakhs, making them accessible to small business owners who may not have significant assets to pledge as security.
Repayment Tenure:
The repayment tenure for MUDRA loans can vary from lender to lender but is typically structured to be affordable for micro-enterprises and small businesses.
Types of Mudra Loans:
Shishu: Covers loans up to 50,000 INR. This is for entrepreneurs who are in the initial stages of setting up a business.
Kishore: Covers loans between 50,001 INR and 5 lakh INR. This is for businesses that have been operational but need additional funds to grow.
Tarun: Covers loans between 5,00,001 INR and 10 lakh INR. This is for established businesses looking for further expansion.