Pradhan Mantri MUDRA Yojana (PMMY) is popular among small and medium businesses. And suppose you are looking for a capital loan to cover expenditure for your business activities, before applying for the MUDRA loan. In that case, you should be aware of the eligibility criteria set by the government and where you can apply for this loan in India. Purpose of borrowing the MUDRA loan MUDRA loan is provided for a variety of reasons (income generation and employment creation). If you want to borrow this government-approved small business loan, do ensure you are borrowing money mainly for: equipment finance, agri-allied non-farm income-generating activities (pisciculture, bee keeping, poultry farming, etc.), to buy tractors, tillers, as well as two-wheelers used for commercial purposes only. The loan criteria set by the government to borrow under PMMY. To apply for a MUDRA loan, you need to keep the following in check: You should not have defaulted to any bank or NBFC. Must have a good credit track record. Submit the necessary skills or experience document that proves you have the knowledge to undertake the proposed activity. Educational qualification documents, if any, are assessed based on the nature of the proposed activity (as you've mentioned in the loan application) and its requirements. Where to apply for a MUDRA loan in India? The Government of India has approved various financial institutions as part of the MUDRA initiative. This includes Public Sector Banks, Private Sector Banks, state-operated cooperative banks, rural banks from the regional sector, Micro Finance Institutions (MFIs), Non-Banking Finance Companies (NBFCs), and Small Finance Banks (SFBs). Additionally, other financial intermediaries that Mudra Ltd. approves are also recognised as member financial institutions. To apply for a Mudra Loan, applicants must provide several essential documents. This includes a duly filled Mudra Loan application form available at www.mudra.org.in and identity proof documents such as Aadhaar, PAN, Driving License, Passport, Voter ID, or any government-issued photo ID for all applicants, especially in the case of joint loans. Additionally, residence proof documents are required, which can be a latest utility bill, Aadhaar, Voter ID, Passport, or a bank account statement of all applicants. It's also necessary to submit business ID and address proof documents, which may consist of Udyog Aadhar, licenses, registration certificates, or deed copies. Applicants should include the latest photographs as well, along with proof of SC/ST/OBC/minority status if applicable. Furthermore, evidence of the loan requirement, such as equipment quotations and vendor details, must be provided, along with any other documents as specified in the sanction terms.(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
Who is eligible for a MUDRA loan in India: purpose of borrowing, loan criteria set by the government
