MUDRA stands for Micro Units Development & Refinance Agency Ltd. The purpose of MUDRA is to provide affordable credit at multiple levels and types of businesses.

MUDRA stands for Micro Units Development & Refinance Agency Ltd. The purpose of MUDRA is to provide affordable credit i.e. providing funding to the unfunded entrepreneurs/ non corporate small business sector/segment.

Non-Corporate Small Business Segment (NCSBS) comprises of proprietorship/partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits/vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, food processors and others in rural and urban areas are eligible for assistance under Mudra. Even Graduated people who want to start up with a small business, artisans, potters, production business, manufacturing unit, trading and services can also avail loan under Mudra.

MUDRA scheme covers educated as well as uneducated people who want to start up with a small business, artisans, potters, production business, manufacturing unit, trading and services can also avail loan under Mudra.

Under MUDRA small borrower can avail loan from any Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non Banking Finance Companies (NBFC) upto Rs 10 lakhs for non-farm income generating activities.

As Mudra will be availed by Micro, Small and Medium Enterprises, funding will be required at different stages for growth / development. Therefore there are three schemes under Mudra i.e Shishu, Kishore and Tarun where one can avail funding under Mudra.

  1. Shishu :
    Shishu means child i.e This scheme is the first step of starting a business. The start-up businesses or one who have new business can avail loan under Shishu Scheme. Shishu loans support small business. The scheme covers loans upto Rs. 50,000/-
  2. Kishore :
    Kishore is the another step than shishu where the one, who has started business but is yet to be established can avail loan under Kishore Scheme. The loan amount covered will be above Rs.50,000 and up to Rs. . 5,00,000.
  3. Tarun:
    Tarun is a further step than Kishore where micro business units having established business and want to invest more for the betterment or expansion of business can avail loan under Tarun Schme. The loan amount covered will be above Rs. 5,00,000 and up to Rs. 10,00,000

Loans upto Rs. 10 lakh issued by banks under Micro Small Enterprises is given without collaterals.

Eligibility for availing MUDRA Loan :

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 10 lakh can approach either a Bank, MFI or NBFC for availing of MUDRA loans under PMMY. The applicant should not be a defaulter of any bank/FI/NBFC.

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