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Mudra loan disbursals not down with Pandemic

The Indian economy had to face numerous challenges during the pandemic situation. The economic fallout had a significant impact on many people’s livelihood. A lot of these individuals lost their jobs, experienced pay cuts and many small businesses were affected too. To ease the financial stress, the Indian government took various measures like loan moratorium and loan restructuring plans. The Government also introduced Pradhan Mantri Mudra Yojana (PMMY) to provide financial help for Micro, Small & Medium Enterprises (MSMEs) to grow further and expand. There are 3 categories of Pradhan Mantri Mudra scheme namely Shishu, Kishor and Tarun. The maximum loan amount offered through the scheme is up to Rs. 10 lakh. Given below is the loan amount provided under each loan scheme.

Mudra Loan Shishu Loan Kishore Loan Tarun Loan
Business Start-ups and New Businesses Purchasing Equipment/Machinery, Raw materials, Business Expansion for Existing Enterprises Established Businesses and Enterprises
Loan Amount Loans up to Rs. 50,000 Loans from Rs. 50,001 to Rs. 5,00,000 Loans from Rs. 500,001 to Rs. 10,00,000

Effect on Rural Economy

According to provisional data available with PMMY, many small businesses have been sanctioned loans worth Rs. 40,473. The loans were sanctioned in the first four months of the current financial year under the Pradhan Mantri Mudra Yojana (PMMY). Despite the impact of the pandemic, mudra loan amount of Rs. 35,386 crore has been disbursed. Many rural banks and Microfinance Institutions (MFIs) offered loans during the pandemic. The results were entirely unexpected as loan disbursal was expected to be much lower, as the rural economy has not been hit as hard by the pandemic.

In the first and second quarters, the disbursal of mudra loan was relatively steady, but the number gradually increased in the second half of the financial year. At the end of the financial year on March 31, 2020, the total sanctioned amount was at Rs. 3,23,574 crore as on March 27, compared to Rs. 3,21,723 crore during the financial year ended in March 2019. The banks are expected to review their non-performing assets (NPAs) after September as the focus is now on providing liquidity during the pandemic situation.

Year 2019-2020 2018-2019 2017-2018
Mudra Loan Growth Rs. 3,23,574 cr Rs. 3,21,723 cr Rs. 2,31,677 cr

Who can Apply for Mudra Yojana?

The following are the business entities that can avail the Mudra Scheme:

  • SMEs related to agricultural activities.
  • Artisans
  • Small manufacturers
  • Repairing shops
  • Vendors and shopkeepers
  • Textile industry
  • Food production sector
  • Truck owners
  • Self-proprietors
  • Service sector firms

Where to Apply?

MUDRA Yojana under Pradhan Mantri Mudra Yojana (PMMY) can be availed Online or offline by numerous eligible lenders. They are as follows:

  • Private Sectors Banks
  • NBFCs
  • Commercial and Co-operative banks
  • Small finance banks
  • Regional Rural Banks (RRBs)
  • Micro Finance Institutions (MFIs).

PMMY Application Process

There are several banks and financial institutions that provide Mudra Loan mentioned below are steps to apply for mudra yojana offline as well as online through the portal.

MUDRA Loan Apply Offline

Step 1: Visit the desired or nearest commercial or private sector bank to apply for Mudra Yojana

Step 2: Submit a self-written business plan and a duly filled loan application form.

Step 3: Along with the application form, submit all the required documents such as Identity proof, address proof, company’s address, balance sheets, IT returns, sales tax returns, passport-sized photographs and other such details.

Step 4: Fulfill all other procedures and formalities of the bank, and once all the documents are verified, the loan shall get approved

Step 5: On approval of the loan, the desired amount shall get disbursed to the mentioned bank account within specified working days.

Mudra Loan Apply Online

Step 1: Visit the official site at mudra.org.in and download the mudra yojana application form.

Step 2: Start filling in all the required details in the loan application form such as your name, address, contact number and other such information.

Step 3: Submit other documents along with the mudra yojana form like Identity proof, address proof, address proof, IT Returns, bank statements and further machinery details.

Step 4: Complete other procedures and the documents will be verified by the bank or financial institution you want to apply for Mudra loan.

Step 5: Once verified, the applicant will receive a Mudra card through which he/she can withdraw the amount.

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