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Introduction
The Indian MSME sector is the powerhouse of the national economic system and has continuously acted as the Indian economy's stabilizing force, providing it with strength to survive global economic shocks and adversities. Spread across the country with more than 63.4 million units across the country, MSMEs contribute around 6.11% of manufacturing GDP and 24.63% of GDP from service activities as well as 33.4% of manufacturing output from India. They provide employment to around 120 million people and contribute about 45 percent of India's total exports.
The Government of India, in its continuous efforts in boosting this sector and regularizing it to a much larger level, has introduced a number of schemes. The Pradhan Mantri MUDRA Yojana (PMMY) scheme is one such scheme set up with the sole purpose of creating easy access to the rural entrepreneurs to affordable financing and helping to lower their financing costs.
About Bank of Maharashtra Mudra Loan
- What is Mudra Loan?
- What is the objective of the MUDRA loan?
- Key features of the MUDRA Loan offered by Bank of Maharashtra
- Bank Of Maharashtra Mudra Loans Interest Rate
- How to apply for MUDRA loans with Bank of Maharashtra?
- Eligibility criteria to apply for MUDRA Loan with Bank of Maharashtra
- What can the loans taken under MUDRA Yojana be used for?
- Bank of Maharashtra MUDRA Loans FAQs:
What is Mudra Loan?
As per Department of Financial Services, Ministry of Finance, Govt. of India’s letter No.27/01/2015-CP/RRB dated May 14, 2015 loans given to non-farm income generating enterprises in manufacturing, trading and services whose credit needs are below Rs.10 lakh by all the Public Sector Banks, Regional Rural Banks, State Cooperative Banks and Urban Co-operative Banks will be known as MUDRA loans under the Pradhan Mantri MUDRA Yojana (PMMY). All such loans can be covered under refinance and/or credit enhancement products of MUDRA.
In addition to these banks, NBFCs and MFIs operating across the country can also extend credit to this segment, subject to their compliance with the approved eligibility criteria, for which they can avail financial assistance from MUDRA Ltd.
To begin with, MUDRA has enrolled 27 Public Sector Banks, 17 Private Sector Banks, 27 Regional Rural Banks and 25 Micro Finance Institutions as partner institutions to channel support to the ultimate borrower based on eligibility criteria.
Bank of Maharashtra is one of the partner banks, designated to disburse MUDRA loan to the deserved.
What is the objective of the MUDRA loan?
The core objective of the MUDRA Loan is making timely financing accessible and affordable for MSME units in those rural areas where banking is not full-fledged. It attempts to distribute maximum benefits through the following objectives:
- Act as an authority to streamline the MSME sector by developing comprehensive policy guidelines
- Registering and regulating all the Microfinance Institutions by bringing them under the same umbrella
- For the progress and development of the small businesses sector
- Timely assistance to lower income groups in building and expanding their business
- To boost lending to the SC/ST entrepreneurs
- Acts as a regulatory body for all Microfinance Institutions that are dealing with trading, manufacturing, and services
Key features of the MUDRA Loan offered by Bank of Maharashtra
MUDRA loan is disbursed under 3 different categories, based on the size of the enterprise and the loan amount required
- Shishu – Loans up to Rs.50000, with rate of interest being 1% per month or 12% per annum. Repayment period 5 - 7 years.
- Kishore - Loans from Rs.50001 up to Rs.5 lakhs. The interest rate would depend on the lender, keeping the applicant's credit history in mind in compliance with the scheme guidelines. Repayment duration depends on the bank's discretion.
- Tarun - Loans from Rs.5 lakhs to Rs.10 lakhs. The interest rate would depend on the lender, keeping the applicant's credit history in mind in compliance with the scheme guidelines. Repayment duration depends on the bank's discretion.
- Term loan & cash loan facility of up to Rs.10 lakh to non-farm units engaged in manufacturing, trading and service activities.
- Financing of up to Rs.10 lakh for the food products sector, activities allied to agriculture and services in these areas included under PMMY.
- The PMMY scheme will cover the overdraft facility extended to all eligible PMJDY beneficiaries.
- No requirement of collateral & third party guarantee.
- All cash credit account holders under PMMY will receive a MUDRA Debit Card for instant access to funds.
Bank Of Maharashtra Mudra Loans Interest Rate
MSE loans up to Rs.10.00 lakh Agricultural allied activity, food processing etc. Slab wise interest rate as under | MCLR+BSS |
Up to Rs.50000/- | MCLR+BSS+0.75% |
Above Rs.50000/- & up to Rs.2.00 lakh | MCLR+BSS+1.50% |
Above Rs.2.00 lakh & up to Rs.10.00 lakh | MCLR+BSS+ 2.00% |
BSS: Business Strategy Spread which is at present: 0.25%
How to apply for MUDRA loans with Bank of Maharashtra?
- Borrowers who wish to seek assistance under Pradhan Mantri MUDRA Yojana (PMMY) may approach the local branch of Bank of Maharashtra. You can also apply online.
- Submit the duly filled application form.
- Submit all relevant documents required for a speedy and hassle free process.
- Upon satisfactory documentation, sanction letter is issued for your enterprise.
- You can get the loan amount disbursed in your account directly.
Documents required for loan application:
- Proof of residence
- Proof of identity
- Proof of SC/ST/OBC/Minority, if applicable
- Bank statements
- Last 2 years of unaudited balance sheets
- Income tax/sales tax returns
- Quote for the Machinery or other items to be purchased
- Supplier details/Details of the machinery/Price of Machinery
Documents required if you are applying working capital:
- Business address proof
- Business registration certificate
- Proof of continuity of business
- 2 years income tax returns
- 12 months bank statement
- Business continuity proof
Eligibility criteria to apply for MUDRA Loan with Bank of Maharashtra
The MUDRA loan is primarily instated targeting Non–Corporate Small Business Segment (NCSBS) comprising of millions of proprietorship and partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits & vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
The Finance Minister reiterated that while the lending target were scaled up, the scheme would focus on women, backward classes, minorities, Dalits, and tribal who were not usually given the appropriate opportunity to get finances for their businesses.
What can the loans taken under MUDRA Yojana be used for?
The loans under this scheme could be utilized for the following purposes:
- Car loan
- Commercial vehicle loan
- Two-wheeler loan
- Working capital loan
- Loan for plant and machinery
- Revamping the business space
Bank of Maharashtra MUDRA Loans FAQs:
1. What is MUDRA?
MUDRA, which stands for Micro Units Development & Refinance Agency Ltd. was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016. This institution was set up by Government of India for development and refinancing activities relating to micro units. It functions with the core purpose of providing funding to the non-corporate small business sector in rural areas where there is not much reach of the traditional banking system.
2. Who are eligible for this credit facility from MUDRA? What kind of borrowers are covered under the MUDRA scheme?
This scheme primarily focuses on Non –Corporate Small Business Segment (NCSBS) comprising largely of proprietorship and partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits and vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
3. Whom should I contact to avail loans under the MUDRA scheme?
The loan can be availed at all Public Sector Banks, Regional Rural Banks, State Cooperative Banks and Urban Co-operative Banks. The loan will be known as MUDRA loans under the Pradhan Mantri MUDRA Yojana (PMMY). In addition to these banks, NBFCs and MFIs operating across the country can also extend credit to this segment, subject to their compliance with the approved eligibility criteria, for which they can avail financial assistance from MUDRA Ltd. To begin with, MUDRA has enrolled 27 Public Sector Banks, 17 Private Sector Banks, 27 Regional Rural Banks and 25 Micro Finance Institutions as partner institutions to channel support to the ultimate borrower based on eligibility criteria.
4. I would like to set up a small business dealing in paper goods. Can I get a MUDRA loan?
Yes, you can apply for loans of up to Rs.50,000 under the 'Shishu' category of MUDRA loans and under the 'Kishor' category you can get amounts up to Rs.5 lakh. You can approach any of your nearby MFIs, NBFCs, Banks etc. to avail this facility.
5. What kind of assistance can I get for food processing units?
Food Processing is very much covered under one of the MUDRA schemes. Please contact your nearest MUDRA authorized lender to know more about the relevant scheme. You can avail assistance under MUDRA schemes as per your requirements.
6. Are women given special assistance under the MUDRA scheme? I have done my fashion designing and would like to set up my own boutique. What assistance can MUDRA offer me?
The Mahila Uddyami Scheme is specially designed for women entrepreneurs and is covered under MUDRA. Under this scheme, women can avail assistance under all three groups, viz. 'Shishu', 'Kishor' and 'Tarun'.
7. Are franchisee business models covered under MUDRA? I would like to take up a franchisee for an ice cream parlour.
The 'Business loans for Traders and Shopkeepers' is a special scheme operated under MUDRA. Please contact your nearest MUDRA authorized lender to know more about the relevant scheme. You can avail assistance under MUDRA schemes as per your requirements.
End Note:
MUDRA aims at bringing last mile financial support to the rural and underserved areas of the country. It helps in the progress and development of MSME units that have provided large employment opportunities in these underdeveloped areas in the rural populace. These collateral free loans, up to an amount of Rs.10 lakhs, have helped a number of established as well budding entrepreneurs in realizing their dreams of setting up their own business unit.
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