MUDRA loans are given under three different categories – Shishu (for tiny business units), Kishor (slightly bigger units), Tarun (relatively bigger units)
With The Positive Collective, The Better India’s COVID-19 coverage is available to regional language publications for free. Write to firstname.lastname@example.org for more details.
Launched in the year 2015, Micro Units Development and Refinance Agency (MUDRA) is a Non-Banking Finance Company (NBFC) set up by the government to support the micro-enterprise sector.
During the Finance Minister’s announcement of the COVID-19 package, small businesses, amongst the hardest-hit segments, have been given liquidity support through the MUDRA scheme.
What is the Purpose of MUDRA?
- The intent, while launching this scheme, was to support the small-scale businesses that don’t have access to formal channels of borrowing.
- According to reports, more than 90 per cent of the non-corporate small business (NCSB) sector does not have access to formal sources of finance.
- MUDRA provides refinance support to many financial institutions, including public and private sector banks, regional rural banks, state cooperative banks, microfinance institutions, and non-banking finance companies.
Who is Eligible for a Loan under MUDRA?
- Any entrepreneur running a small business enterprise is eligible to apply for this loan.
- MUDRA loans are given under three different categories
– Shishu (for tiny business units) which covers loans upto Rs 50,000,
– Kishor (slightly bigger units) which covers loans above Rs 50,000 and upto Rs 5 lakh and
– Tarun (relatively bigger units) which covers loans above Rs 5 lakh and upto Rs 10 lakh.
- Over and above this, MUDRA also operates a special refinance scheme for women entrepreneurs, called Mahila Uddyami Scheme.
How Can One Apply for a MUDRA Loan?
Applicants need to have the following documents ready – proof of identity (Aadhaar, Voter ID, PAN, Driving License, etc.), address proof (electricity bill, telephone bill, gas bill, water bill, etc.), proof of business (business registration certificate, etc.)
• Applicants need to approach a financial institution to avail this loan.
• Upon filling the application form, and furnishing all details as required, they also have to fill out the amount they need.
• Once these steps have been carried out, the bank or financial institution will sanction the MUDRA loan.
COVID-19 Impact on MUDRA
• A 2 per cent interest rate subvention for 12 months to prompt loan payees under the Mudra scheme.
• Special loans of up to Rs 10,000 to provide working capital for street vendors to restart businesses.
• This scheme is likely to benefit more than 30 million credit takers.
(Edited by Saiqua Sultan)
Support the voice of unsung heroes and extra-ordinary citizens
We believe that It is essential for a country like ours to have a voice that celebrates unsung heroes, gives a platform for change makers, inspires millions of people. By using the power of constructive journalism, we want to change India – one story at a time.
While we do have advertising revenues, they aren’t enough to cover the costs of bringing all these stories to you. So, if you believe in us and a better India, and want this positive news movement to grow, then do consider supporting us via the above buttons.
Like this story? Or have something to share?
Write to us: email@example.com
Connect with us on Facebook and Twitter.