The Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Government of India in 2015. The term MUDRA is an acronym for Micro Units Development & Refinance Agency Limited. And as the name indicates, the PMMY scheme aims to provide easy and accessible financing to small and micro enterprises in the non-farm, non-corporate sectors.
Under this scheme, enterprises that qualify for loans can borrow up to Rs. 10 lakhs to finance their business needs and activities. There are also different types of loans offered under the Pradhan Mantri MUDRA Yojana. Let’s take a closer look at them.
Types of Loans under the PMMY Scheme
There are three different types of loans available under the Pradhan Mantri MUDRA Yojana. Each loan is useful for different kinds of small businesses, based on what stage of their growth they are in. Check out the three kinds of MUDRA loans below.
1. Shishu Loans
Shishu loans are loans up to Rs. 50,000. Micro businesses or small and medium enterprises looking for small loans can opt for this product. This works best for businesses with minor capital requirements like machinery or equipment purchase.
To avail this MUDRA loan, apply by submitting the required documents, which are as follows:
- Quotation of all purchases to be made with the amount including machinery and equipment
- Details of all purchases to be made
- Details of the supplier/s from whom the machinery and equipment will be purchased
2. Kishor Loans
Kishor loans meet larger needs ranging from over Rs. 50,000 up to Rs. 5 lakhs. Since this is a bigger loan than the Shishu loan, the document requirements are also a bit more extensive. If you wish to get this MUDRA loan apply along with the following paperwork:
- Balance sheets of the last two years (if any)
- Memorandum of Association (MOA) (if any)
- Articles of Association (AOA) (if any)
- Account statements from the banker for the last six months
- Estimated balance sheet for one year or for the entire tenure of the loan
- Sales account details for the current financial year, up to the date before the loan application
- Income tax returns and sales tax returns
- A report of the technical and economic sustainability of the business
3. Tarun Loans
Tarun loans under the Pradhan Mantri MUDRA Yojana cover borrowings above Rs. 5 lakhs up to Rs. 10 lakhs. As you may have guessed, the documents needed for this kind of loan will be quite extensive. Check out the paperwork you need to apply for this loan.
- Balance sheets of the last two years
- A report of the technical and economic sustainability of the business
- Memorandum of Association (MOA) (if any)
- Articles of Association (AOA) (if any)
- Account statements from the banker for the last six months
- Estimated balance sheet for one year or for the entire tenure of the loan
- Sales account details for the current financial year, up to the date before the loan
- Income tax returns and sales tax returns
- Proof of identity of the applicant (like PAN card, Aadhaar card, driver’s license, voter’s ID, etc.)
- Proof of address of the applicant (like passport, driver’s license, Aadhaar card, etc.)
- SC, ST, OBC, etc. certificate of the applicant (if applicable)
Conclusion
Now that you know the details of the types of loans offered under the Pradhan Mantri MUDRA Yojana, you can go ahead and apply for the loan that best meets your needs. If you do plan to avail a MUDRA loan apply for the same along with the required documents so your loan application can be processed sooner and the amount can be disbursed to you in a hassle-free manner.
Salman is a prolific environmental writer, and has authored more than 500 articles in reputed journals, magazines and websites. He is proactively engaged in creating mass awareness on renewable energy, waste management, sustainability and conservation all over the world.
Salman can be reached on salman@cleantechloops.com
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