What are the Advantages of a Mudra Loan?

India is a country where the economy thrives with both small-scale and large-scale industries adding to the growth of the financial state of the nation. Large-scale industries secure credit to keep themselves up and running, largely because they draw in higher funding and give employment opportunities to millions of Indians. However, they employ only a meagre amount of the total workforce of India. Contrastingly, smaller industries, largely falling within the unorganised segment, are the ones that employ the majority of Indians. It is ironic that these hotbeds of employment face cash crunches and have tremendous difficulty securing funds. To fight this credit discrepancy between small and large-scale industries, the Prime Minister, Shri Narendra Modi, had a vision and sought to establish the “Micro Units Development and Refinance Agency Ltd. or the MUDRA scheme. To meet this goal, the MUDRA Bank was initiated in 2015, and now, small industries are able to get the financing they need with a MUDRA loan online. 

Advantages and Features of a MUDRA Loan

You can apply for E MUDRA loan online at any time. However before you do, it is imperative to know the distinctive features, that translate to advantages, of the MUDRA loan:

  • The MUDRA Loan is offered through three schemes according to needs and requirements of the borrower. These are Shishu, Kishore and Tarun plans. The Shishu loan scheme lets novice entrepreneurs borrow up to Rs. 50,000. The Kishore scheme is meant to cater to the needs of entrepreneurs who wish to see the expansion of their business, and loans available are from Rs. 50,000 – Rs. 5 lakh. The Tarun loan scheme is geared toward fairly established businesses that need supplemental funding anywhere from Rs. 5 lakh – Rs. 10 lakh.
  • Affordable interest rates are available with loans, at nil interest for the Shishu scheme, and at up to 10% for the others.
  • Loan processing fees may be charged when you apply for a MUDRA loan online, but this is waived for the Shishu loan. 
  • The tenure of repayment of loans is between 3 to 5 years.
  • Loans are approved for brand new enterprises and already prevalent businesses. 
  • Various kinds of businesses are covered by the loan,and these include, transportation, personal services (salon, gyms, dry cleaning, tailoring, etc.), agriculture (bee keeping, livestock rearing, etc.), food industry (sweet making, canteen services, etc.), and other businesses like traders, handloom businesses, grocery shops, etc. 
  • Funds from loans can be used for various purposes like setting up a new business, refinancing businesses, modernising businesses, expansion of businesses, working capital requirements, etc. 
  • Zero collateral needs to be shown while availing the loan, and this is a boon for new businesses. 

How to Apply for E MUDRA Loan

  • Step 1: You can visit the MUDRA website at www.mudra.org.in and easily apply for E MUDRA loan
  • Step 2: By filling in a form in a stepwise process, loan application is easy. 
  • Step 3: However, you need to be eligible for availing the loan, and will have to provide documentation in this regard. All micro, small and medium enterprises (MSMEs) are eligible to apply for the MUDRA loan online. 

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