Any business needs funds to grow and maintain sustainability. Hence, large-scale industries endure and never run out of finances. They have different means to do the same. Lenders are quick to consider their credit requests due to large-scale operations. However, medium and small-scale enterprises do not enjoy the same privilege. Despite contributing to the country's economy, they struggle with finances.

This affects their functioning and eventually leads to their downfall. To keep them afloat, the Indian Government introduced a scheme called Pradhan Mantri Mudra Yojana. Under this, small and medium-sized businesses get monetary aid if they satisfy Mudra Loan eligibility. The term Mudra stands for Micro Units Development and Refine Agency. Here is what you should know about it:

Eligibility criteria

Any business that has a plan that impacts economic growth is eligible to get a Loan. However, your financial requirement should be below Rs. 10 lakh and qualify as a micro, small, or medium enterprise. You can apply from both rural and urban areas if you meet the lender's eligibility requirements. This is subject to change based on their policy. But some standard parameters include your age, borrowable amount, industry type, Loan term, etc.

Application procedure

Once you check the eligibility, proceed to apply for the Loan. Most banks allow you to use the PM Mudra Loan online apply option on their websites. The procedure for the same includes:

1. Visit the link for Mudra Loan on the bank's website.
2. Download the application form and fill in the details such as your name, number, income, etc.
3. Submit the required documents along with the application.
4. Track the verification process.
5. Once approved, the amount gets credited to your Business Account.

Products

The Mudra Loan eligibility changes among its three variants – Shishu, Kishor, and Tarun. They get categorised based on the level of monetary requirements and development stage of small-scale companies. Shishu Yojana gives up to Rs. 50,000 for micro-businesses. Kishor Yojana focuses on medium sectors that aim to expand with an amount ranging from Rs. 50,000 to Rs. 5 lakh. Lastly, Tarun Yojana offers the highest amount that exceeds up to Rs. 10 lakh.

Industries covered

The scheme is aimed towards uplifting the MSMEs. Its primary purpose is fulfilling requirements like expansion, training staff, purchasing machinery, funding working capital, buying equipment, etc. These benefits are reserved for specific business owners like shopkeepers, business vendors, food production, agriculture, handicraftsmen, service-based companies, etc. Therefore, check if you qualify before applying.