The Government of India launched the Micro Units Development & Refinance Agency Ltd. (MUDRA) Yojana in Fiscal 2015 to help small business owners meet their credit requirements. Its main goal is to assist micro to small business owners with financing so that they can enhance their earning opportunities and contribute to the country’s economy profusely. You can easily apply for the MUDRA loan online by visiting the official website of the financial institutions in India.
How to Apply for MUDRA Loan Online
You can get the MUDRA loan facility from public/private/regional-rural sector banks, micro–Finance Institutions, non-banking financial institutions, etc. After selecting a financial institution, you need to follow the below-mentioned steps to apply for the credit online:
Step 1: Visit the official website of a financial institution that provides MUDRA loans
Step 2: Go through all the information available on the website regarding three types of MUDRA loans, which are Shishu, Kishor and Tarun
Step 3: Choose the type of MUDRA loan you need
Step 4: Enter required personal and business details like the name, birth date, residential and business address, etc.
Step 5: Attach necessary documents
Step 6: Verify all your entered details and submit the filled-in application form
After you successfully apply for the MUDRA loan online, your lending institutions will connect with you soon to instruct you about the subsequent proceedings.
Nevertheless, if you are not comfortable with the online application process, you can also approach your chosen financial institution to request the MUDRA credit offline. You need to know the offline application process as well.
Offline Application Process for MUDRA Loan
Here are the steps you will have to follow to apply for this MUDRA loan offline:
Step 1: Visit the physical branch of a financial institution that offers this MUDRA loan
Step 2: Request the application form for this credit
Step 3: Fill it in with every necessary personal and business details
Step 4: Attach necessary documents
Step 5: Submit your duly filled application form
After this, the lender will check and verify your credit request. If you are eligible for the loan, the lender will get in touch with you to tell you about the follow-up application process.
Required Document for MUDRA Loan
Whether you apply MUDRA loan online or offline, you should keep all the necessary documents for mudra loan handy. Otherwise, you may have to experience last-minute hassles. Following are the basic documents you will require:
- Identity Proof: Voter ID card, Aadhaar card, PAN card, driving license, passport, etc.
- Residential Proof: Aadhaar card, residential certificate, water bill, electricity bill, or other government-issued documents
- Business Proof: Income statement, GST returns, certificate of business, etc.
- Caste certificate: Scheduled caste or tribe
- Photocopy of your savings account statement for the last 3 months
- Your income tax returns (ITRs)
- Your business plan to make a profit with the credit availed through the MUDRA loan
Eligibility Criteria for MUDRA Loan
Before applying for the credit, you also need to ensure that you meet the following eligibility standards as mentioned below:
Your age must be between 18 and 65 years
You must be a small business owner from manufacturing, trading and other sectors
So, the eligibility parameters of this collateral-free MUDRA loan are lenient, letting you get the credit easily.
Businesses You Can Finance through the MUDRA Loan
You can get a MUDRA loan if you have a venture from the following business sector:
- Agricultural Allied Business: If you have an agricultural firm for poultry, pisciculture, dairy farming, livestock-rearing, fishery, bee-keeping, etc., you can get the credit.
- Service Activities: You will be eligible for the loan for having service-oriented ventures like salons, tailoring shops, dry cleaning, gyms, two-wheeler repair shops, boutiques, pharmacies, courier agents, etc.
- Food-Production Sector: If you have a small business that caters to the production of foods like papad, pickles, bread, ice cream, sweets, biscuits, etc., you can apply for the credit. Further, if your business unit provides canteen, catering or food-preserving services, it can get financial assistance under this MUDRA scheme.
- Textile Sector: You can be a beneficiary of this credit scheme for having a textile business of powerloom, handloom, stitching, traditional handwork, embroidery, apparel design, dyeing, cotton ginning, knitting, etc.
- Transport-Vehicle Owners: Owners of transport vehicles like taxis, electric-rickshaw, three-wheelers, or owners of power-tillers and tractors can get MUDRA loans.
Features and Benefits of MUDRA Loan
Here are the advantages you can get by securing a business loan under this MUDRA scheme:
- You can choose a repayment tenure between 3 and 5 years.
- If you belong to the category of scheduled caste or tribe, you can enjoy a discount on the interest rate.
- It is a collateral-free credit, thereby reducing your time and effort in applying for the loan.
- There is no restriction on the end-usage of credit obtained through the MUDRA loan. You can leverage the capital as you intend so that you can accelerate your business growth.
Applying for the MUDRA loan online is quite simple and straightforward. You can easily complete the process by visiting the official website of a financial institution. Nevertheless, before you apply, you should ideally develop a sound plan stating how you will leverage the credit to enhance your business growth. This will increase your chances of getting approval for your credit request.
