Mudra Loan Eligibility

Last Updated 10th Aug 2020

Mudra Yojana Eligibility

Minimum age 18 years
Maximum age 65 years
Who all can avail loan? Loans can be availed by new and existing units
Collateral No collateral or third party security is required
Lending Institutions Eligible Public Sector Banks, Private Sector Banks, Regional Rural Banks, Micro Finance Institutions
Documents Identity proof, residence proof, application form and passport size photos

Eligibility Criteria for Mudra Loan

The Government of India has designed MUDRA loans under the Pradhan Mantri Mudra Yojana (PMMY) scheme to help small business owners to meet their capital needs and operating costs through easy finance schemes. Anyone who runs small business enterprise is eligible to apply for a Mudra Loan. The following entities are eligible to apply for Mudra Loan:

  • The minimum age of the applicant must be 18 years and the maximum mudra loan age limit is set to 65 years.
  • Loans can be availed by non-farm income-generating businesses in trading, manufacturing and services.
  • The requirement of credit must be Rs. 10 lakh or lower.
  • Entities must be engaged in allied agriculture services since 1st April 2016.

Lending institutions that are eligible to provide Mudra Loan

All public sector, private sector and regional rural banks are eligible to provide Mudra Loan if they satisfy the following criteria:

  • Banks should have generated profits during the last two years.
  • Net performing assets should not be more than 15%, 10% and 6% for public, private and regional rural banks respectively.
  • Net worth should be above Rs. 250 crore for private and public sector banks, while for rural banks it should be above Rs. 50 crore.

Who can avail Mudra Loan?

The following kinds of business entities can avail the MUDRA loan:

  • Business vendors and shopkeepers: Shopkeepers and vendors can apply for a loan ranging up to Rs. 10 lakh for different business activities, trading, and non-farming activities.
  • Textile industry: Textile industries such as handloom, knitting, khadi work, etc. can get several monetary benefits with the help of this loan scheme.
  • Food production sector: Entrepreneurs dealing in food stalls, tiffin services or cold storage can avail this loan scheme and expand their business with the help of Mudra funding.
  • Agricultural activities: Loan under this scheme can be availed for agricultural activities such as dairy farming, poultry, fishing and improvement of small canals and wells.
  • Businesses providing services to a community or society: Businesses that provide services to other community or society such as beauty parlours and salon, gymnasiums, dry cleaning shops, medical shops, tailoring shops, etc.

Documents Required for Mudra Loan

The Mudra loan eligibility documents are different for different purposes. The documents required for specific purposes are as follows:

Documents for Vehicle Loan

  • Duly filled application form of Mudra Yojana
  • Vehicle loan application form
  • 2 passport size photos of the applicant
  • Identity proof such as Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
  • Address proof such as Aadhaar Card, Passport, Bank statements, telephone or electricity bill
  • Income proof
  • Bank statement for latest 6 months

Documents for Business Instalment Loan

  • Duly filled application form of Mudra Yojana
  • Loan application form
  • 2 passport size photos of the applicant
  • Identity proof such as Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
  • Residential Address proof such as Aadhaar Card, Passport, Bank statements, telephone or electricity bill
  • Proof of ownership of the enterprise or residence
  • Proof of qualification, establishment and business continuity
  • Trade references
  • 2 years ITR and CA certified financials
  • Bank statement for last 6 months

Documents for Business Loan

  • Duly filled application form of Mudra Yojana
  • Loan application form
  • Identity and Age proof such as Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
  • Residential Address proof such as Aadhaar Card, Passport, Bank statements, telephone or electricity bill
  • Proof of ownership of the enterprise or residence
  • Proof of qualification, establishment and business continuity
  • Proof of business continuity
  • Bank statement for last 12 months
  • Income tax return for recent 2 years

FAQs

Is CIBIL score required for Mudra loan?

No, CIBIL score is not required to get a Mudra loan as the government has launched this scheme to help people start a new business or grow an existing business.

Is PAN card mandatory for Mudra loan?

No, PAN card is not mandatory to get Pradhan Mantri Mudra Yojana. However, the bank may ask for KYC documents to approve the loan.

Can Mudra loan be availed to purchase goods vehicles and taxis?

Yes, Mudra Loan can be availed to buy taxis, transport vehicle or passenger car. Business owners can also purchase an auto rickshaw using Mudra Loan.

Can Mudra Loan be availed for setting up a beauty parlour?

Yes, Mudra Loan can be availed for setting up beauty parlours and salons. It can be also availed for other services such as for opening gyms, tailoring shops, dry cleaning businesses, etc.

What kind of businesses in the agriculture sector can apply for Mudra Loan?

The following types of businesses in the agricultural sector can apply for Mudra Loan:

  • Livestock
  • Poultry
  • Bee keeping
  • Fishing
  • Agribusiness centres
  • Agriclinics
Which type of Mudra Loan is best suited for startups?

Shishu loan under the Mudra Loan scheme is best for startups. Under this scheme, one can apply for up to Rs. 50,000 loans. Shishu loans are for business owners who need small capital to start their business. You need to present your business idea for availing this loan.

Does an applicant need to have an account in the same bank to get a Mudra loan?

No, it is not mandatory to apply for a Mudra loan from a bank where an applicant holds an account.

*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More