Pradhan Mantri Mudra Yojana

The main criterion for the eligibility under the PMMY is that all the small and micro enterprises (SMEs) should be from the Non-Corporate and Non-Farm Sector.

A few other criteria to be met for eligibility are,

• The Applicant/Business should be engaged in income generating activities, i.e., generating minimum revenues
• The Applicant/Business should be engaged in manufacturing, trading or service sector (including allied agricultural activities since 1st April 2016).
• Loan amount needs of the Applicant/Business to be of a maximum Rs. 10,00,000.
• The minimum and maximum age requirement under PMMY is 18 years and 65 years respectively.

MUDRA loans Under PMMY can be availed by any of the following entities,

• Business owners
• Shopkeepers
• Professionals
• Startup Entrepreneurs
• Small Industrialists
• Manufacturers
• Persons involved in agricultural activities

Documents for PMMY

The documents required for the MUDRA Loans are basic KYC documentation like any other loan requirement.

Basic documents,

If the entity requires loan for working capital, or if loan is applied under KISHOR or TARUN categories, the additional documents required are,

Business Information

• Business address proof
• Business registration certificate
• Proof of continuity of business
• Director Identity Number or DIN for all the Directors, if any.
• Photographs of the Applicant(s) or Director(s) or each of the partners
• Total experience in the current line of business
• Last 2 years actual sales
• Projected sales figures, details regarding revenues, debtors and creditors of the entity, working cycles, inventories, promoter’s contribution, etc.
• 2 years income tax returns
• 12 months bank statements
• Current financial year sales records
• For a loan amount of more than Rs. 2,00,000 the applicant must provide the unaudited balance sheet of the previous year
• Assets and liabilities statement of the company
• Memorandum of Association (MOA), Articles of Association or Partnership Deed
• Statuses regarding the Statutory Obligations have to be provided. E.g. Registration under the Shops and Establishment Act, Registration under MSME, latest Sales Tax filed, etc.

Banking /Credit Facilities Existing and Proposed

• Types of facilities for savings bank account, current account, cash credit account, term loan account, letter of credit or bank guarantee
• Current bank details
• The total limit already availed and the amount proposed
• The purpose of loan to be availed
• A certification statement from borrowers ,if any, that no loan amount was procured from any other financial institutions or any other bank other than the one as mentioned in Section E

Term Loan Required for any Asset/Equipment

• Type and purpose of such asset/equipment
• Name of the supplier and the quotation of such asset or equipment
• Promoter’s total contribution

Loan Details of PMMY

The loans provided under PMMY are divided in three categories based on the stage of business development that the organization seeking the loan is. The details of the loans are mentioned below.

Rate of Interest

The interest rates across all the categories of the MUDRA Loans depend upon various factors. These factors are mentioned below.

• Amount of loan sought
• Applicants profile
• Nature of business
• Credit score

The interest rates are communicated by the bank to its customers after the completion of the loan submission and verification process.

Benefits of PMMY Loans

The PMMY loans are targeted for the growth and progress of the MSME sector and to provide them with the benefit of easy access to financing options. The PPMY launched with this aim has several benefits in store for the MSME sector. Some of these benefits are discussed below.

One of the main benefits of this scheme is the availability of funds without any need for collateral or security. The lenders provide finance to the eligible borrowers up to Rs. 10,00,000 without any collateral requirements.

Many lenders provide loans under PMMY without any processing charges. In other cases, the processing charges charged by the lenders are at very nominal rates.

The loans provided to the eligible units can be in any of the following form,

• Term loans
• Overdraft facility
• Letter of credit
• Bank guarantees

This enables the lenders to cater to a huge range of MSME requirements.

There is no minimum amount of loan prescribed under PMMY unlike many other traditional banking loan options.

The borrowers also get a MUDRA card upon receiving the loan sanction. This card can be utilized for withdrawal purposes from the MUDRA Account up to the permissible withdrawal limits.

FAQs – PMMY