Business

Even an artisan can seek a loan under Mudra scheme for a small amount upto Rs 50,000 Mudra was set up for the growth of entrepreneurship in the non-corporate small business sector to offer financial support.
Over 90 per cent of the small business sector doesn't have access to formal sources of finance.
Mudra loan offerings are made to refinance for micro units to commercial banks, NBFCs, regional rural banks and cooperative banks and micro finance institutions (MFIs).
It is publicized as Pradhan Mantri Mudra Yojana (PMMY).
There are four kind of funding support from Mudra: the first one is micro credit scheme for loans upto Rs one lakh finance through MFIs, the second is refinance scheme for commercial banks/ regional rural banks/ scheduled cooperative banks, the third is meant for women enterprise programme, and the last one is securitisation of loan portfolio.
Mudra is defined as Micro Units Development And Refinance Agency (MUDRA) and it was set up as a wholly owned subsidiary of SIDBI (Small Industries Development Bank of India).There are essentially three finance schemes under the aegis of MudraShishu: This is meant for the diminutive firms with loan requirements of upto Rs 50,000.Kishor: The financing through Kishor scheme meets the needs of slightly bigger firms with loan requirements between Rs 50,000 and Rs 5 lakh.Tarun: This caters to the needs of bigger firms that have loan requirements higher than Rs 5 lakh but less than Rs 10 lakh.Mudra's delivery channel is conceived to be through the route of refinance primarily to banks/ NBFCs/ MFIs.Practically anyone can access loan under the Mudra scheme.
Even a small time artisan can seek loan under the Shishu category through any banks/ MFIs (micro-finance institution)Even someone who wants to start a boutique, ice cream parlour, pottery business or a food processing unit can access Mudra loans to start a business, says Mudra's official website.Eligibility of borrowers: Any Indian citizen who has a business plan for a non-farm income generating activity such as manufacturing, processing, trading or service sector whose credit need is less than Rs 10 lakh can approach either a bank, MFI or NBFC for availing of MUDRA loans under PMMY.Mudra credit card: Mudra card is an innovative credit product wherein the borrower can avail of credit in a hassle free manner.
It provides a facility of working capital arrangements in the form of CC/OD to the borrower.
Mudra card is a RuPay debit card, it can be used for drawing cash from ATM or business correspondent or make purchases using point of sale.
The card can also be used to repay the amount, reducing the interest cost.Interest rate: In the case of banks, RBI has also put a cap on the interest rate at base rate/ MCLR for lending micro units by commercial banks by availing of MUDRA refinance.
Similarly, the RRBs (regional rural banks) and cooperatives have been given an interest cap of 3.50 per cent over and above MUDRA refinance rate, while lending to MUDRA loan by availing of MUDRA refinance.In case of NBFCs, RBI has also stipulated a interest cap of 6 per cent over and above MUDRA refinance while their lending to MUDRA segment.





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