Discover how the MUDRA loan for women provides easy financing to help women entrepreneurs start or expand their businesses.
Since its inception in April 2015, the Micro Units Development & Refinance Agency (MUDRA) loan program has supported small businesses in India. As of November 24, 2023, women received 306.4 million loans under the Pradhan Mantri MUDRA Yojana (PMMY), amounting to 69% of all sanctioned loans.
With MUDRA loans, women entrepreneurs can access funds up to ₹10 Lakhs to start or grow their businesses. Lower interest rates and flexible repayment options, make it easier for women to manage their business finances.
The terms of eligibility for a MUDRA loan for women entrepreneurs are also easy to meet. Through the loan, MUDRA promotes women’s empowerment by encouraging self-sufficiency.
This scheme provides crucial financial support to small and micro enterprises through three categories. These include:
1. Shishu (up to ₹50,000)
This category helps aspiring entrepreneurs and early-stage business owners. Shishu loans offer a maximum of ₹50,000 to establish and grow business ventures.
2. Kishor (₹50,000 - ₹5 Lakhs)
Kishor loans assist businesses looking to expand. They range from ₹50,000 to ₹5 Lakhs, allowing entrepreneurs to scale operations, purchase equipment, or increase working capital.
3. Tarun (₹5 Lakh - ₹10 Lakhs)
Tarun loans can help established enterprises get the required financial support. These loans range from ₹5 Lakh to ₹10 Lakhs, enabling businesses to expand, diversify, and develop further.
This financial scheme comes under the Pradhan Mantri MUDRA Yojana (PMMY). It supports small and micro enterprises in the non-farm, non-corporate sector. Here are some key features and benefits of a MUDRA loan:
Loan Amount and Categories
With this loan scheme, you can get funding of up to ₹10 Lakhs. You can choose from three types of loans, Shishu, Kishor, and Tarun, to meet an enterprise's varying funding needs and developmental stages.
No Collateral Required
Women entrepreneurs can benefit from the assurance that no collateral or security is necessary to secure these loans. This makes it easier for them to access funds.
Competitive Interest Rates
MUDRA loan for ladies features low interest rates that vary based on the lender and loan amount. This ensures affordability for borrowers.
Versatile Usage
Women entrepreneurs can utilise this loan for a wide range of purposes. Some of these purposes include securing working capital, purchasing plants and machinery, business expansion, and more.
Multiple Lending Sources
Women can obtain these loans from various institutions, including public and private sector banks, regional rural banks, and co-operative banks. Additionally, microfinance institutions and non-banking finance companies also provide these loans.
Women entrepreneurs need to qualify for funds as per the parameters set by the Government of India. These include the following:
Applicants have to be Indian citizens
Applicants need to be at least 18 years old
- Women helming non-farm, non-corporate businesses in sectors such as manufacturing, trading, and services, including both new startups and existing businesses, are eligible
- A well-documented business plan is often essential for securing Mudra financing
Documentation requirements for the MUDRA Loan may vary by lending institution and loan type. Women entrepreneurs need to verify the exact paperwork required by their chosen bank or financial institution before applying.
Some of the typical documents needed are:
Identity Proof: This can include an Aadhaar card, voter ID, passport, or any other government-issued identification
Address Proof: Acceptable documents include utility bills, an Aadhaar card, voter ID, passport, or a rent agreement
Business Plan: A comprehensive proposal detailing the nature of the business, project costs, and revenue projections is essential
Ownership Proof: Documents confirming ownership or legal occupation of the business premises are required
Quotation/Estimates: If relevant, provide estimates for machinery, equipment, or working capital needs
Bank Statement: Bank statements for the last six months are necessary to evaluate financial stability
Caste Certificate: This is necessary for borrowers belonging to special categories
Proof of Category: If applicable, submit an SC/ST/OBC certificate
Frequently Asked Questions
How does the MUDRA scheme benefit women entrepreneurs?
The MUDRA scheme allows women entrepreneurs to secure up to ₹10 Lakhs of affordable loans. By leveraging this credit facility, they can:
Expand business opportunities
Create jobs
Foster economic growth
Empower themselves financially
Are there any special provisions under the MUDRA scheme for women?
Yes, MUDRA extends a reduction of 25 basis points in interest rate to institutions providing loans to women entrepreneurs. It aims to encourage female entrepreneurship by enhancing access to finance.
Can individual women borrowers apply for MUDRA loans?
Yes, individual women borrowers can get loans under the MUDRA scheme, provided they meet the eligibility criteria. This initiative supports women in starting or expanding their businesses by making financial resources more accessible.
What is the minimum loan amount available under the MUDRA scheme for women?
The MUDRA scheme has no minimum loan amount. However, the maximum loan amount is ₹10 Lakhs. This flexibility allows entrepreneurs to seek funding that aligns with their business needs.
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