What is Pradhan Mantri MUDRA Yojana?

Indian economy is world’s fastest growing economy. It holds the GDP growth rate of 7.1% (as of 2016 statistics) and its service sector is improving rapidly with an annual growth rate above 9%. India aims to be one of world’s super powers in near future. The business sector in India supports its economic growth heavily. The contribution of micro and small business segments is considered as equal with the contribution of huge conglomerates. They pioneer the growth of Indian economy and help to sustain it in local and rural places. But many of these micro and small business segments especially in rural India face huge funding problems. Though their financial requirements are small, it becomes difficult for them to get desired financial backing.

Thus the Indian government introduced Pradhan Mantri MUDRA Yojana in 2015 in order to provide financial backing to micro and small business set ups in India. The main purpose of Pradhan Mantri MUDRA Yojana is to provide funds to non-corporate & non-farm small business sectors. The Pradhan Mantri MUDRA Yojana is beneficial for micro units across nations. Micro units include small organizations, start-ups and small companies. Here is a list of a few small business segments which can get benefits:

• Proprietorship
• Partnership firms
• Small manufacturing units
• Service sector units
• Shopkeepers
• Fruit or vegetable vendors
• Truck operators
• Food service units
• Repair shops
• Machine operators
• Small industries
• Food processors
• Other industries in rural and urban areas.

There are many advantages and benefits of Pradhan Mantri MUDRA Yojana. The eligibility to avail a business loan under this scheme is very nominal yet specific. The basic eligibility criteria are listed below:

The applicant of the loan has to be Indian citizen.

The age of the applicant should be minimum 23 years. And it should not exceed more than 65 years at the time of loan maturity.

The applicant should take loan for non-farm income generating purpose.

The applicant should be a non-corporate set up.

The applicant should not be defaulter to any bank or financial institution.

The applicant should have a satisfactory credit track record.

The applicant may be required to possess the necessary skills/experience/ knowledge to undertake the proposed activity for which the Pradhan Mantri MUDRA Yojana loan will be taken.

The need for educational qualification, if any, needs to be assessed based on the nature of the proposed activity, and its requirement while taking the loan under Pradhan Mantri MUDRA Yojana.

The applicant should have monthly income above Rs. 17, 000*.

If the applicant is a salaried individual, then he or she will require the minimum occupational stability of 2 years and business stability of at least 5 years.

The applicant should be living at the current residence for a period of minimum 1 year.

All Indian citizens irrespective of their region/ caste/ class/ religion/ physical disability/ economic background/ language/ gender/ color can get a loan under Pradhan Mantri MUDRA Yojana loan.

Besides government regulations, the applicant will have to fulfill the eligibility criteria of the lender bank or NBFCS. Their criteria differ as per their institutional policies.

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