The Government of India launched the PMMY scheme on 8th April 2015 in an attempt to provide collateral-free finance to the Micro, Small and Medium Enterprises (MSMEs). The Government declared that around 18.26 Crore advances have been sanctioned under the Mudra Loan till 31st March 2019.
Uses of PMMY loans
You can use the availed loan amount to meet multiple professional needs such as expanding your business to another location, managing working capital, updating infrastructure, etc.
To avail such collateral-free loans, you will have to furnish some documents as discussed below:
Documents required
The documents required for a business loan under this scheme are:
?KYC documents - like Aadhaar card, PAN card, Voter ID, passport, driving license, etc.
?Residential proof - like water bills, electricity bills, gas bills, telephone bills, etc.
?Business existence proof - such as GST registration certificates, SEBI registration certificates, SSI registration certificates, partnership deeds, etc.
?Business addresses proof - these include rent agreements, electricity bills, etc.
Also, you will have to provide your GST registration certificate. You can register for GST online on the official portal. Besides, you will also have to provide machinery and other items quotations and your passport-sized photograph.
Application process
Some of the benefits of MSME loan under this scheme are lower-interest rates and are easily accessible. The application process for such unsecured business loans is convenient, and you can do so online.
To apply, follow the below-mentioned steps:
Step 1.Visit the official website of MUDRA Loan and download the application form.
Step 2.Fill the application form with your financial and personal details like your name,
address, date of birth, parent’s name, annual income, yearly turnover, etc.
Step 3.Select the preferred financial institution or NBFC for the Pradhan Mantri Mudra loan scheme.
Step 4.Complete all the formalities of your lender and furnish the required documents.
Step 5.After your documents are verified, and the application process is completed, the loan will be sanctioned, and the amount will be disbursed accordingly.
While you fill out the application form, make sure to provide accurate details. Provide your Aadhaar and PAN details carefully. Also, if you belong to the SC, ST or OBC category, you will have to furnish your cast certificates. Besides, it would be beneficial if you hold an ideal credit score when applying for loans under this scheme.
Loan amount
Under the Pradhan Mantri Mudra loan scheme, individuals can avail loans up to Rs. 10 Lakh. The types of loans available are:
?Shishu - Under this loan, applicants can avail up to Rs. 50,000.
?Kishor - You can avail a loan amount anywhere between Rs. 50,000 and Rs. 5 Lakh.
?Tarun - Borrowers can apply for a loan amount ranging anywhere between Rs. 5 Lakh and Rs. 10 Lakh.
These advances can be applied online by visiting the official website of your lender. On the official website, you will have to fill out an application form with the required details. After your application gets approved a representative of your lender will visit you to collect the required papers like KYC documents, address proof, income proof, etc. As and when your documents are verified, the amount will be transferred to your account directly.
The interest rates at which you can avail advances under the Pradhan Mantri Mudra loan scheme are affordable and ranges between 8.40% and 12.45% depending on your financial stability and repayment capability. The repayment tenor provided to the applicants is extended to 5 years.
(The views and opinions expressed in the attached post solely belong to the author and is not plagiarized to the best of our knowledge.)