In India, the Prime Minister initiated a project Mudra Yojana Subsidy, to provide financial assistance to young entrepreneurs and businessmen in India. One can get a working capital or a business loan under the Mudra Loan scheme. Mudra Loan doesn’t have any subsidy being offered by Banks and financial institutions.
Prime Minister Mudra Yojana can provide financial aid to non-farming companies, small and micro firms, traders and manufacturers. If you want to get Mudra Loan, you must approach the nearby bank branch and get the finance in your name for your business.
The PMMY doesn’t provide subsidies for the loans that you avail yourself of. A loan application that is proposed by an applicant may be linked to any government scheme and then you may get some government capital subsidy and not otherwise.
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Mudra Yojana Subsidy
Mudra Loan Subsidy is money that is provided by the government for business. It is for the welfare of the society so the interest rate is low. Mudra loan subsidy is provided for social programs like petroleum, and fertilizers business.
Mudra Loans Types
Since India is developing at the highest place so far, the entrepreneurs are getting loans to start their businesses and promote the Indian economy. The types of Mudra Loans that have been helping the businessmen are the following.
Shishu Mudra Loan Scheme
The business that is in the initial state has the best option to choose for financial help. It is the Shishu loan scheme. The new entrepreneurs who are keen to establish themselves in the market can very easily begin their journey from Shishu Loan. The maximum loan amount that it offers is Rs 50,000. Therefore you can get this loan with minimum formalities and in less time.
Kishore Mudra Loan Scheme
Kishore loan scheme suits best the businessmen who are already running their business and wish to expand it. The loan offers loan amounts from Rs 50k to Rs 5 Lakh. It includes more formalities than the Shishu loan.
Tarun Mudra Loan Scheme
Tarun loan scheme is helpful when you wish to incur business expenses that amount to Rs 5 lakh or more. You can avail of loans up to Rs 10 Lakh to bear the cost of your business and expand it. This loan has maximum formalities and it is mandatory to submit ITR with other documents in the bank.
Mudra Loan For Doctors also exist and thus they can also avail this loan to buy some machinery or any equipment for their clinic. All they have to do is to present all their documents that relate to establishment of their work place and experience of practice etc.
Repayment and Interest Rate Of Mudra Loan
The rate of Interest for Kishore, Tarun and Shishu loans is 1% per month or 12% per annum as per government norms. The interest rate also depends on the documents you have, Cibil Score and ITR. It also varies from bank to bank as every bank has its guidelines and protocols.
The repayment tenure is maximum to be 5 years. You can discuss with the banker your comfortable repayment tenure for your loan amount. The more the tenure, the more rate of interest you have to pay for these years.
Have you ever realized what will happen if you are not able to repay the Mudra Loan? What does the bank do? Check out for failure to repay Mudra Loan so that you are in no problem further.
Mudra Loan Eligibility
- To avail of the Mudra Loan from a bank or financial institution, you need to check whether you are eligible for the loan or not. Check out below.
- The age criteria for Mudra Loan that is fixed by the government is 18 years to be the minimum age eligibility and the maximum age eligibility for Mudra Loan is 65 years at the time of maturity.
- Mudra loan is offered to micro-business like vendors, skilled labour, service companies and shopkeepers.
- Corporate firms are not eligible to take this loan.
- Non Farming companies are not given Mudra Loan.
- Individuals with good credit history and credit scores get Mudra Loan very quickly.
- If you are not a defaulter in any bank, you can get Mudra Loan too.
- You must have no criminal record to avail this loan.
Mudra Loan Activities
The main objective of the Mudra Loan is to provide credit to small scale business owners. To do so, Mudra Loan has come up with genuine products that will suit your requirement. Mudra loans have the following products.
Mudra Loan provides you credit so that you can purchase your vehicle and use it for commercial purposes. You can also avail of Mudra Loan For E-Rickshaw. This will help you transport goods and passengers from one town to another. The wide range of vehicles that fall under this product is E-Rickshaw, Auto, small trucks, taxis, passenger cars etc.
Community, social and service activities
A business that provides services to customers can also get Mudra Loan like parlours, salons, garages, cycles, cars, clothing stores, phone booths, medical stores etc.
Food and Processing Units
Micro and small scale companies who run the business of papad making, jams and jelly making, pickle making, bread and buns, ice-creams etc can get Mudra Loan to meet their financial needs.
The business houses which deal in the work of zari, handmade embroidery, chikan, tie and die, apparel designing etc can avail of Mudra Loan with the support of the bank. Since this business doesn’t require much loan amount. It is processed in a few hours only.
Features Of Mudra Loan
- Mudra Loan helps to uplift the depressed sections of society. Mudra loan helps to achieve the goal of helping the small scale sector with credit facility and thereby uplifting the economy of the country.
- Mudra Loan facility was started with a motive to create sustainable growth and boost entrepreneurial culture that increases employment in the country and other opportunities in the market.
- Mudra Loan works to empower the women of the country by helping them establish their own small and micro-businesses.
- The micro-business units that are running with Mudra Loan make good profits. They avail the loan on low-interest rates and encourage employment opportunities as well.
- It aims to provide business education that helps small scale entrepreneurs to run and efficiently manage their setups.
Frequently asked questions on Mudra Loan Subsidy
Mudra Loan doesn’t provide any subsidy. It is simply a scheme to avail loans at low-interest rates that can be given by banks and financial institutions. The subsidy can be provided to businesses like petroleum and fertilizers.
Mudra Loan offers no percentage for subsidy. You get business loans up to Rs 10 Lakh on lucrative interest rates and that’s it. You need to fulfil the formalities according to the guidelines of the banks. You also get loans with no extra processing fee.
There is no mudra loan subsidy for reserved castes like SC/ST/OBC. They may get some additional benefit in the interest rate or loan amount that too if there is some protocol in the bank.
As such there is no Mudra Yojana Subsidy. In future if any modifications are made in Mudra Yojana Subsidy we shall be the first one to update the information.