What are the documents required for Mudra loan for business?

What is a Mudra loan?

PMMY, or Pradhan Mantri Mudra Yojana scheme, was started in 2018. It was created to finance the micro or small-scale industries to help them grow or expand their business.

The amount used to facilitate finance to the small-scale industry is up to Rs. 10 Lakh. Under the Mudra scheme, a subsidiary of SIDBI is provided to the Commercial Banks, RRBs, Small Finance Banks, MFIs, and NBFCs so that they can further lend loans to the non-corporate, non-farm small/micro-enterprises.

Under the Mudra loan scheme details, there are three different loans: Shishu, Kishore, and Tarun. These are based on the type of stage the micro-industry is in.

Shishu Yojana

Shishu loan is given to micro- or small-scale industries to grow their startups, which they have just begun. It’s generally given up to Rs. 50,000. It can be used for those who want to start their small business. Before getting the loan you seek, you need to present your business idea to the lender, and only then can you avail of the loan.

Kishore Yojana

Kishore loans are loans given to a business that has already been in the business for quite some time. These loans fall in the brackets of around Rs. 50,000 to Rs. 5 lakh. The business uses Kishore Loan to expand and grow into a viable enterprise. To apply for the loan, you must fill out the application form and present the required documents to the lender.

Tarun Yojana

The tarun loan is given to small industries that want to grow their business. The loan provided under Tarun Yojana is up to Rs. 10 lakh.

Mudra loan assists Micro, Small, and Medium Scale Enterprises to grow their business. The loan helps them start a new business, purchase the necessary machinery, and ensure a smooth flow of working capital. It also assists in buying equipment and hiring staff.

So, Who Can Apply for the Loan?

Business vendors and shopkeepers can apply for the loan. People in the textile industry can opt for the loan. The food production sector and agricultural activities can go for the loan. Artisans and small manufacturers can apply for the loan. Repairing shops, truck owners, self-proprietors, and service sector firms can apply for the Mudra loan.

What are the Documents Required for the Loan?

• You will need passport-sized photographs of the applicant
• You will require Proof of identity such as an Aadhaar Card, Passport, Voter ID card, Driving License, etc.
• You will require residential proof such as an Aadhaar Card, passport, bank statements, and a telephone or electricity bill.
• Document such as Proof of Address of the enterprise will be needed.
• Any proof of identity and license of the enterprise.
• Any proof of quotation of items to be purchased for business use.

The Bottom Line

Mudra loan was started to empower small and medium-scale industries. It was created so that these industries thrive and expand their business. E-Mudra loans can be received by both new and existing micro and small enterprises. Mudra Loan assists startups and existing businesses, those who fall under MSMEs, with finance and an easy flow of capital. For more, check out Finserv MARKETS.