e-MUDRA Loan

The Union Government launched the e-MUDRA loan in 2015 under the Pradhan Mantri MUDRA Yojana (PMMY). It offers financial support to small and micro-businesses to fund various types of business-related expenses. 

If you are an Indian citizen with a business fulfilling the scheme’s eligibility criteria, you can apply for this credit to expand your business.

The Union Government provides MUDRA loans in the form of a term loan, overdraft limit, and composite loan. It helps provide credit of up to ₹10 Lakhs to income-generating non-corporate, non-farm enterprises who need financial support.

You can apply online for the e-MUDRA loan through various avenues. Some of these are banks,  Non-banking Financial Companies (NBFCs), Microfinance Institutions (MFI)s, and the Udyamimitra Portal.

With these loans, small and micro-business owners looking for financial support can enjoy various advantages, such as:

• Entrepreneurs do not need to provide any guarantee

• Business owners can borrow up to ₹10 Lakhs

• The online application process saves time

• Loans up to ₹5 Lakhs typically come with no processing fees

• Repayment terms extend up to 5 years based on eligibility and loan amount

• Banks and financial institutions offer competitive interest rates

• Funds can be used for starting, expanding, or managing working capital

• Eligibility criteria are simpler to meet than those for regular business loans

The interest rates for these loans vary depending on the lending institution. Here is a general overview of some of these interest rates:

You can choose from 3 credit option for financial support. These include:

1. Shishu: It  offers a maximum of ₹50,000 to help entrepreneurs establish and grow their ventures

2. Kishore: These loans range from ₹50,000 to ₹5 Lakhs and assist entrepreneurs to scale operations, increase working capital, and more

3. Tarun: This category ranges from ₹5 Lakhs to ₹10 Lakhs, enabling businesses to expand and develop further

You need to meet certain criteria and furnish the specific paperwork to utilise this credit facility. The eligibility criteria and documents required for an e-MUDRA loan are:

Applying for an e-MUDRA loan is simple. Follow these steps for a smooth application process:

1. Go to the official Udyamimitra website

2. See the MUDRA Loans section on the page and click on the ‘Apply Now’ option

3. Select your category as a ‘New Entrepreneur’, ‘Existing Entrepreneur’, or ‘Self-Employed Professional’

4. Enter your name, contact number, and email ID, then click ‘Generate OTP’

5. Input the OTP received on your registered mobile number to complete the registration

6. Fill out your professional and personal details

7. Choose the hand-holding agencies option if you need any help; otherwise, select ‘Apply Now’ under the ‘Loan Application Centre’

8. Choose from the three schemes: ‘Tarun’, ‘Shishu’, and ‘Kishore’

9. Provide basic business details after selecting the scheme

10. Enter information about proprietors and directors, existing credit facilities, estimated working capital, and credit report

11. Attach the required documents and submit the application

You can apply for these loans from different financial institutions by following these easy steps:

1. Visit the official website or download the mobile app of a financial institution offering these MUDRA loans

2. Login if you are an existing customer or register with the institution

3. Ensure you have all required documents, including ID proof, address proof, and a business plan

4. Follow the required steps and submit the necessary documents to your application

5. Wait for further information about your application status