Pradhan Mantri Mudra Bank Loan Yojana (PMMY)

It has been the strongest endeavor of the Prime Minister Narendra Modi to bank the unbanked
population. He, in all his addresses emphasizes the importance of bringing the unbanked people
under the mainstream banking in order to make the neglected section of population self reliant
and self dependent. Mudra Bank Loan yojana comes as a vision from the Prime Minister by the
slogan, ‘Fund the Unfunded’. MUDRA means Micro Units Development and Refinance
Agency. This initiative has been started after the success of PM Jan Dhan Yojana.

Population engaged in small businesses always requires micro finance to facilitate their business
and day to day business needs. PM Mudra Bank Yojana would help in facilitating micro credit
up to Rs 10 lakh to such small business owners. PM Mudra Bank already has a corpus of more
than Rs 20,000 and this amount would help in increasing the overall output and creating newer
jobs.

The recovery method under pradhan mantri mudra yojana

Mudra Bank would work on both ends, as per the scheme. It would ensure that proper and
adequate credit facility is facilitated to the needy entrepreneurs on one hand, whereas, accurate
and efficient recovery method is followed by the banks on the other, to create a justifiable and
balanced credit system.
The stages and reach of loan under pradhan mantri mudra yojana

There are three main stages of PM Mudra Bank Yojana:

Maximum
SNO Stages Details
Amount
This stage would cater to entrepreneurs who are either in
their primitive stage or require lesser funds in order to get
1 Shishu RS 50 Thousand
their businesses started. Under this stage the applicant
would be eligible to get up to Rs 50,000 credit.
This stage would cater to entrepreneurs who have
requirement of funds in the range of Rs 50,000 and Rs 5
lakh. This section of entrepreneurs would belong to either
2 Kishor Rs 5 Lakhs those who have already started their business and want
additional funds to mobile the business or those who
simply require this much of money to start up their
businesses.
If an entrepreneur meets the required eligibility
conditions, he/she could apply for a loan up to Rs 10
3 Tarun Rs 10 Lakhs
lakh. This would be the highest level of amount that an
entrepreneur could apply for a start up loan.

What you should know about Pradhan Mantri Mudra Yojana

Apart from what we have already informed about PM Mudra Bank, following are the things that
you should know as well:

1. The Pradhan Mantri Mudra Bank Yojana is said to benefit more than 58 million small
business owners in the country. This is one sector under which more than 120 million
people are employed and this working population mostly comes from less privileged
sections of society.
2. The majority of small businesses owners in India have always remain outside the ambit
of mainstream bank credit. This is just because banks and financial institutions often
focus their products and services for the secured business lot, who would repay at higher
interest and have their monies secured. PM Mudra bank yojana would help in getting this
trend changed.
3. Institutional finance has always been relevant to small businesses. However, inadequate
corpus and unorganized management of credit facility to small entrepreneurs never really
made it reach the need entrepreneurs. A PM Mudra bank yojana comes with a dream to
get the dreams of many young and budding entrepreneurs fulfilled.
4. Repayment has always been a concern why financial institutions could not provide
required finance to small business owners. With this initiative from the PM office, the
scheme is said to take care of this part as well and thus help both financial institutions
and needy small business owners come on one single platform.
Any scheme of government initiative is not good or bad until it is executed and the results of
which are thorough analyzed. PM Mudra Scheme too falls under the same category. The
scheme certainly comes with a noble initiative; however, it would really be quite early to say
how it would actually benefit the target population.

Please find the application of PMMY Mudra Yojana using this link. This Scheme is going to be
launched on September 25 2015.

Mudra Loan Yojana Interest Rate

Many people have started inquiring about the Mudra Loan Interest. We have got some
clarification on this, interest rate wont be fixed and would depend on the type of your business
and the bank. Each bank will have their own criteria.

Government may give some subsidy on the interest but the percentage is still not declared.
Details on this could be found more on the official site

We have just heard that corporation bank has offered Mudra Loan at interest rate of 11-12%.

How to apply Mudra Loan

There is no formal or structured way of applying Mudra Loan. You will have to talk to each bank
near you and ask them the procedure to apply. There is no way you can apply it online.

Mudra Loan Yojana in SBI

Government has decided to provide loan under Mudra Yojana through SBI from September 25
2015 to October 2 2015. Forms of Shishu has already been launched but rest of the forms are
still not come out. Under Shishu scheme you could avail loan upto rs 50,000 only. Seems like the
first drive of Mudra Bank Yojana in SBI would attract very basic loan ie upto rs 50 thousand
only.

26/09/2015

Each Bank has been given the target to give loan under this yojana. It is been estimated that each
bank unit should give loan to around 25 business units. This is an average figure and cities with
more population will get higher number of loans.

27/07/2015

In an event organised FM said that the Mudra Loan Yojana is going to help small entrepreneur
and eventually would lift Indian economy. This will directly and indirectly create lakhs of jobs.

29/09/2015
Hurry Guys 24 thousand crore rs have already been given as Shishu Mudra loan across India.
You have time till 2nd oct 2015 to avail this loan.

30/09/2015

Two more banks have come up with Mudra Card they are SB Jaipur and bikaner. Also Rs 3 crore
has been given to various business in Sagar District (MP).

01/10/2015

Gurgaon business men have untill now received around rs 14 crore loan. Around 1400 people
have benefited from this scheme.

04/10/2015

PM Modi has said that he is planing to help around 6 crore people under this flagship program.

10/10/2015

It is a bizarre news that some of the banks are seeking small business to take this loan.

02/12/2015

Narendra Modi had said that Modi Mudra Loan yojana launched is only for small business and
rich people cannot avail it. He is still not happy with the way mudra loan has been disbursed.

07/12/2015

Union Minister Mr Jayant Sharma has said that around rs 42 thousand cr has already been
disbursed under this scheme.

18/01/2015

Rs 50,000 crore have already been given to small business owners in India. Most of these loans
have been given in rural areas.

20/01/2015

SBI have launched an initiative and in west Bengal and given Shishu loan to women who owns
small Business. As per the news the number of women given loan is 80.

Pradhan Mantri Mudra Yojana Complaint Office

I have got a lot of people inquiring about the complaint office of Mudra loan Yojana. But just
wanted to tell you guys that Mudra Loan is being offered by banks and you will have to
complaint either to the bank manager or the customer care of the your respective bank.
Banks offering Mudra Loan

Sno Mudra Loan Banks Interest Rate

1 State Bank of India (SBI) Not yet Known
2 State Bank of Mysore (SBM) Not yet Known
3 State Bank of Hyderabad (SBH) Not yet Known
4 State Bank of Travancore (SBT) Not yet Known
State Bank of Bikaner & Jaipur
5 Not yet Known
(SBBJ)
6 State Bank of Patiala (SBP) Not yet Known
7 Vijaya Bank Not yet Known
8 United Bank of India Not yet Known
9 Union Bank of India Not yet Known
10 UCO Bank Not yet Known
11 Syndicate Bank Not yet Known
12 Punjab & Sind Bank (PSB) Not yet Known
13 Oriental Bank of Commerce (OBC) Not yet Known
14 Indian Overseas Bank (IOB) Not yet Known
15 Corporation Bank 11% to 11.9%
16 Central Bank of India (CBI) Not yet Known
17 Canara Bank Not yet Known
18 Bank of Maharashtra (BOM) Not yet Known
19 Bank of India (BOI) Not yet Known
20 Bank of Baroda (BOB) Not yet Known
21 Axis Bank Not yet Known
22 Andhra Bank Not yet Known
23 Allahabad Bank Not yet Known

Mudra Loan Card

In essence, on one hand when the card acts as a credit card with a pre-approved loan amount, it
also acts as a debit card, allowing ATM withdrawals.

Here is a quick look at how the Mudra Card looks like. This is just the approved design by DFS,
Gol:
The Mudra Card will work with RuPay platform and can be used at PoS or Point of Sales. Thus
the card will allow users to:

 Withdraw cash from ATMs

 Swipe the card at PoS.
 Can be used as a credit card to avail the overdraft facility.

As of now, only a few banks have managed to jump onto the bandwagon of Mudra Card and it is
expected that more and more banks will be joining in quickly. As of now the following banks
have come up with Mudra Card: nb bnnb

SNo Bank Name

1 Corporation Bank
2 Punjab National Bank
3 Allahabad Bank
4 Kotak Mahindra Bank
5 Canara Bank
6 Axis Bank
7 State Bank of India

Mudra Bank Loan For Women SC ST and OBC

Government have clarified that women SC ST and OBS would be preferred while giving loans
under this scheme. However there is no reservation as such even the criteria of preference has
also been not disclosed. We are waiting to consolidate the data which may prove this.

Mudra Loan Eligibility Criteria

This loan is only for small businessmen. There is no exact criteria as such. But one thing is for
sure you wont get loan if you have a high turnover. One more thing this loan is not for
educational purpose, you cannot get this loan for buying a house. You can get a vehicle loan for
buying commercial vehicle but not personal.
Mudra Loan Cannot be taken for

These are the list of business for which Mudra Loan cannot be taken.

Mudra Loan Cannot be taken

Sno
for
1 Personal Requirement
2 Educational Purpose
3 Buying Personal Car or Bike
4 Rich Businessman

Pradhan Mantri Mudra Yojana

Micro Units Development & Refinance Agency Ltd. (MUDRA) is a new institution set up by
Government of India to provide funding to the non-corporate, non-farm sector income generating
activities of micro and small enterprises whose credit needs are below ₹10 Lakh.

Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has created three
products i.e. 'Shishu', 'Kishore' and ‘Tarun’ as per the stage of growth and funding needs of the
beneficiary micro unit. These schemes cover loan amounts as below:

a. Shishu: covering loans up to ₹50,000

b. Kishore: covering loans above ₹50,000 and up to ₹5,00,000
c. Tarun: covering loans above ₹5,00,000 and up to ₹10,00,000

All Non-Corporate Small Business Segment (NCSBS) comprising of proprietorship or

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.

Bank branches would facilitate loans under Mudra scheme as per customer requirements. Loans
under this scheme are collateral free loans.

Mudra Loans could be availed for the following

Vehicle loan: Commercial vehicle loan, Car loan and Two-wheeler loan
Business Installment Loan (BIL): Loan for working capital requirement, buying plant and
machinery, renovating offices etc.

Business Loans Group Loans (BLG) and Rural Business Credit (RBC): We offer Drop line
overdraft/Overdraft facility/Working capital loans

Documents Required for Pradhan Mantri Mudra Yojana

Vehicle Loans

 Mudra application form

 Vehicle loan application form
 2 passport size colour photographs
 Photo Identity proof
 Address proof
 Income proof
 Bank statement (last 6 months)

Business Installment Loan

 Mudra application form

 BIL application form
 Photo identity proof
 Address proof
 Establishment proof
 Bank statement (last 6 months)
 Ownership proof of residence/office
 Proof of continuity of business
 Proof of qualification
 Trade references

Business Loans Group and Rural Business Credit

 Mudra application Form

 BIL/RBC application form
 Photo identity and age proof
 Address proof
 Ownership proof of residence/office
  Business vintage proof
 Bank statement (last 12 months)
 Income tax return (last 2 years)

Pradhan Mantri Mudra Yojana

From Wikipedia, the free encyclopedia

Not to be confused with Micro Units Development and Refinance Agency Bank.

Pradhan Mantri Mudra Yojana (PMMY)

पपपपपपपपपपपप पपपपपप पपपपप

Narendra Modi at launch of Pradhan Mantri Mudra

Yojana

Country India

Prime Minister Narendra Modi

Launched 8 April 2015; 9 months ago

Current status Active

Website www.mudra.org.in

This article is part of a series

about
Narendra Modi

 Early life and education

  Public image

Early political career

 Gujarat Legislative Assembly

o 2002
o 2007
o 2012

Prime Minister of India

 Bharatiya Janata Party campaign for Indian general

election, 2014
 Inauguration
 Council of Ministers of Narendra Modi
 Timeline

Global Contributions

 Foreign policy
o Asian
o South Asian
o Middle Eastern
o Neighbourhood first
o Act East policy
o Trips abroad
 Yoga Day
 New Development Bank
 Solar alliance

National

 Budgets
 o
2014
o
2015
 DELP
 HRIDAY
 Housing for all
 Jeevan Pramaan
 Jan Dhan Yojana
 Mudra Yojana
 Jeevan Jyoti
 Suraksha Bima
 Atal Pension Yojana
 Adarsh Gram Yojana
 Gram Jyoti
 Unnat Bharat Abhiyan
 SAARC Satellite
 Campaigns
o Digital India
o Make in India
o Swachh Bharat Abhiyan
o Start Up India
 Missions
o AMRUT
o Smart cities
o TB-Mission 2020
 Establishments
o MUDRA Bank
 Laws
o National Waterway Bill, 2015

 v
 t
 e

Pradhan Mantri Mudra Yojana (PMMY; Hindi: प्रधानमंत्री मुद्रा योजना) under the Micro Units
Development and Refinance Agency (MUDRA) Bank is a new institution being set up by
Government of India for development and refinancing activities relating to micro units. It was
announced by the Finance Minister while presenting the Union Budget for FY 2016. The
purpose of MUDRA is to provide funding to the non corporate small business sector.[1]

Contents

 1 Objectives
 2 Performance
 3 See also
 4 References
 5 External links

Objectives

Under the scheme, Pradhan Mantri Mudra Yojana three categories of interventions has been
named which includes

1. Shishu :- Loan up to ₹50,000 (US$750)

2. Kishore :- Loan ranging from ₹50,000 (US$750) to ₹5 lakh (US$7,500)
3. Tarun :- Loan above ₹5 lakh (US$7,500) and below ₹10 lakh (US$15,000)

These three categories will signify the growth, development and funding needs of the
beneficiaries as well as it will assure the loan amount to be allotted by Micro Units Development
and Refinance Agency Bank.[2]

Performance

Under this scheme, according to MoneyControl.com, nearly 1,65,000 people avail the over-
drafting facility where the government mobilised US$ 157,400,000[citation needed] for this scheme
by 1 September 2015.[3] As of 26th of Sep 2015, Banks have already disbursed ₹240 billion
(US$3.6 billion) to 27 lakh small entrepreneurs under this scheme.[4]

MUDRA Vision

"To be an integrated financial and support services provider par excellence benchmarked with
global best practices and standards for the bottom of the pyramid universe for their
comprehensive economic and social development."

MUDRA Mission

"To create an inclusive, sustainable and value based entrepreneurial culture, in collaboration with
our partner institutions in achieving economic success and financial security."
Pradhan Mantri MUDRA Yojana : How to apply for a Business Loan under
PMMY?

September 30, 2015 by Sreekanth Reddy 465 Comments

Share:

34

I have been receiving lot of queries on Pradhan Mantri MUDRA Yojana (PMMY) or MUDRA
Bank. Many blog readers have been asking for information on loan application procedure, whom
to approach for assistance and which banks / financial institutions are offering loans under
PMMY scheme.

In his last Budget speech (2015-2016), Finance Minister Arun Jaitley proposed to set up a
‘Micro Units Development Refinance Agency (MUDRA Bank) with a corpus of Rs 20,000
crore. On 8th April, 2015 Prime Minister Narendra Modi launched MUDRA Yojana.

Since then many banks and financial institutions have been offering business loans to sole-
proprietors or entrepreneurs of Small & Medium Enterprises under PMMY scheme. It is
estimated that Banks may disburse loans worth Rs 1.22 Lakh crore under PM Mudra Yojana by
end of this fiscal.

In this post let us understand – What are the types of loans offered under PMMY? How to
apply for loans under on Pradhan Mantri MUDRA Yojana? What are the required
documents for processing of loans under MUDRA scheme? What are the contact numbers
for Mudra Bank Loans?

How to avail Business Loans under Pradhan Mantri MUDRA Yojana ?

As of now Mudra Bank is not a full fledged banker. In future this will be converted into a full-
fledged one. Currently it is offering Refinancing services only.

So whom to approach for assistance under PMMY scheme? You can approach any of the
following lending institutions in your respective regions to apply for loans under MUDRA
Yojana. (Picture courtesy Mudra.org.in)

Following are the lending institutions;

 Scheduled Commercial Banks (Public / Private Banks)

 Regional Rural Banks (RRBs)
 Scheduled Urban Co-operative Banks
 State Co-operative Banks
  Micro Financial Institutions – MFIs (like NBFCs, Societies, Trusts
etc.,)

MUDRA has enrolled 27 Public Sector Banks, 17 Private Sector Banks, 27 Regional Rural
Banks and 25 Micro Finance Institutions as partner institutions for channelizing Loan assistance
to the end borrower.

Sanction of assistance shall be as per the eligibility norms of respective lending institution. The
loan will be released to undertake small business activities / micro enterprise.

These lending institutions will then approach MUDRA Bank for financial assistance or for
refinancing of the sanctioned loans.

Types of Loans under Pradhan Mantri MUDRA Yojana (PMMY)

It has been proposed to fund the business units based on the stage of growth or funding needs of
an entrepreneur or a micro unit.

 Under ‘Shishu’ Scheme, loans up to Rs 50,000 will be sanctioned. This is the first stage when the
business is just starting up. (Click on the below image to download Shishu loan application form)

 Under ‘Kishor’ Scheme, loans above Rs 50,000 and up to Rs 5 Lakh will be provided.
 Under ‘Tarun’ category, loan of above Rs 5 Lakh and up to Rs 10 Lakh will be sanctioned.

Key features of Shishu loan are;

 No collateral is required
 No loan processing fee
 Rate of interest is 1% per month
 Repayable in maximum period extended up to 5 years
 Working capital loans will be given through MUDRA cards.
(Mudra Cards are issued by a bank or in association with MFI. It is issued as ‘RuPay’ Debit
card. Cash can be withdrawn from any ATM.)

For details regarding loans above Rs 50,000 under PMMY, you may have to contact your nearest
bank branch.

Checklist for loans under Pradhan Mantri MUDRA Yojana

Following are the documents that are to be submitted along with the MUDRA loan application
form;

 Self-attested Proof of Identity (Voter ID / Driving license / Aadhar card / Passport etc.,).
 Proof of Residence (Recent telephone bill / electricity bill / Voter Id / Aadhar card / Bank
statement / Passport etc.,).
 Loan applicant’s recent Photograph (2 copies).
 Quotation of Machinery / other items to be purchased (if any).
 Name of supplier / details of machinery / price of machinery and / or items to be purchased.
 Proof of Identity / Address of Business Enterprise, copies of relevant Licenses / Registration
Certificates / other documents pertaining to the ownership identity and address of business unit
(if any).
 Proof of category like SC / ST / OBC / Minority etc., (if applicable).

MUDRA Bank Helpline / Contact numbers

If you wish to avail assistance under Pradhan Mantri MUDRA Yojana (PMMY), you can
approach the local branch of any of the above referred institutions in your region.

For information on MUDRA products and for any kind of assistance, the borrower can either
approach/contact MUDRA office at Mumbai or the identified MUDRA Nodal
Officers.
MUDRA has identified 97 Nodal Officers at various SIDBI Regional offices/Branch Offices to
act as “first contact persons” for loans under MUDRA scheme.

The borrower may also visit MUDRA website, mudra.org.in and can send any query/suggestion
to help@mudra.org.in.

My Opinion

It is estimated that there are around 5.77 crore Small Business units (mostly under individual
proprietorship) which run small manufacturing, trading or service businesses in India. These
sole-proprietors or entrepreneurs of Small & Medium Enterprises, find it difficult to get credit /
finance from the financial institutions and end up acquiring loans at very high interest rates from
financiers or money-lenders.

If Pradhan Mantri MUDRA Yojana is implemented well, it surely can be a boon to many of
these small business owners. I believe these types of schemes are better than providing
unnecessary subsidies.

“Give a man a fish you feed him for a day, teach him how to fish and he will never go
hungry”

Kindly share your views and comments on Pradhan Mantri MUDRA Yojana

PM: The biggest capital of the poor is their integrity.

PM: Combination of integrity with MUDRA – capital – will be the key to success for small
entrepreneurs.

पपपपप पपपपप पप पपपपपप

Prime Minister, Shri Narendra Modi, today said that supporting the small entrepreneurs of India
is the biggest way to help the Indian economy grow and prosper. He was speaking at the launch
of the Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency) Yojana in
New Delhi. Stressing the contribution of small entrepreneurs in the economy, the Prime Minister
expressed confidence that within a year’s time, the major banks would also adopt the MUDRA
model.

The Prime Minister said that in our country, one often experiences that things revolve around
mere perceptions, while the details often paint a different picture. Giving the example of the
perception that large industries create more employment, he said that a look at the details reveals
the reality that only 1 crore 25 lakh people find employment in large industries, whereas small
enterprises employ 12 crore people in the country.

The Prime Minister said that while there are a number of facilities provided for the large
industries in India, there is a need to focus on these 5 crore 75 lakh self-employed people who
use funds of Rs 11 lakh crore, with an average per unit debt of merely Rs 17,000 to employ 12
crore Indians. He said that these facts, when brought to light, led to the vision for MUDRA
Bank.

The Prime Minister spoke about his time as the Chief Minister of Gujarat, when he focused on
the environment-friendly cottage industry of kite making, which employs lakhs of poor Muslims.
He said that he brought a research institute from Chennai on board which discovered that small
inputs of skill development were needed in the industry. He said that he felt proud that these
small efforts helped the kite-making industry grow from Rs. 35 crore to 500 crores in Gujarat.

The Prime Minister also gave examples of other small businesses that, with a little help, have the
potential to grow manifold. He said that the biggest asset of the poor is his / her integrity
(imaan). By combining their integrity with capital (MUDRA), it would become the key to their
success – पपपपप पपपपप पप पपपपप. Speaking about women’s self help groups in
particular, the Prime Minister said that the kind of honesty and integrity showed by these loan
takers is seldom seen in any other sector.

The Prime Minister appreciated the efforts made by the banking sector of India in making Jan
Dhan Yojana a success. He said that he envisioned that within a year, banks would queue up to
give loans to MUDRA applicants. The Prime Minister also congratulated SIDBI on the silver
jubilee of its inception, and appreciated the work done by it in supporting India’s small scale
industry in these 25 years.

The Prime Minister said that MUDRA scheme is aimed at “funding the unfunded”. He said that
the small entrepreneurs of India are used to exploitation at the hands of money lenders so far, but
MUDRA will instil a new confidence in them that the country is ready to support them in their
efforts that are contributing so heavily to the task of nation building.

The Prime Minister also spoke about the possibilities of value addition in agriculture. He said
that, we must aim at creating a whole network of farmers engaged in value addition at the
community level. Brand building, advertising, marketing and financial support, when given to
such small entrepreneurs will strengthen the foundation of the Indian economy, he said.

The Prime Minister said that this will not entail any big changes in the existing structures, just a
little empathy, a little understanding and a little initiative. He urged the banks to study successful
models of microfinance, tailored to the local requirements and cultural contexts, which will be
enable us to help the poorest of the poor in a big way.

The Prime Minister said that mere launching of new schemes in not progress. Real success lies in
real change on the ground, as was seen in the Jan Dhan Yojana and PAHAL, which had
delivered concrete results within limited timeframes, he added. He said that the established
financial systems will soon move to the MUDRA-model of functioning, i.e. to support
entrepreneurs that give employment to a large number of people using least amount of funds.

The Union Minister of Finance, Shri Arun Jaitley, the Union Minister of State for Finance, Shri
Jayant Sinha, and the Governor of Reserve Bank of India, Shri Raghuram Rajan, were present on
the occasion.

Press Information Bureau

Government of India
Prime Minister's Office
08-April-2015 12:7 IST
PM launches Pradhan Mantri MUDRA Yojana

PM: The biggest capital of the poor is their integrity

PM: Combination of integrity with MUDRA – capital - will be the key to success for small
entrepreneurs. पपपपप पपपपप पप पपपपप

The Prime Minister, Shri Narendra Modi, today said that supporting the small entrepreneurs of
India is the biggest way to help the Indian economy grow and prosper. He was speaking at the
launch of the Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency)
Yojana in New Delhi. Stressing the contribution of small entrepreneurs in the economy, the
Prime Minister expressed confidence that within a year’s time, the major banks would also adopt
the MUDRA model.

The Prime Minister said that in our country, one often experiences that things revolve around
mere perceptions, while the details often paint a different picture. Giving the example of the
perception that large industries create more employment, he said that a look at the details reveals
the reality that only 1 crore 25 lakh people find employment in large industries, whereas small
enterprises employ 12 crore people in the country.

The Prime Minister said that while there are a number of facilities provided for the large
industries in India, there is a need to focus on these 5 crore 75 lakh self-employed people who
use funds of Rs 11 lakh crore, with an average per unit debt of merely Rs 17,000 to employ 12
crore Indians. He said that these facts, when brought to light, led to the vision for MUDRA
Bank.

The Prime Minister spoke about his time as the Chief Minister of Gujarat, when he focused on
the environment-friendly cottage industry of kite making, which employs lakhs of poor Muslims.
He said that he brought a research institute from Chennai on board which discovered that small
inputs of skill development were needed in the industry. He said that he felt proud that these
small efforts helped the kite-making industry grow from Rs. 35 crore to 500 crores in Gujarat.
The Prime Minister also gave examples of other small businesses that, with a little help, have the
potential to grow manifold. He said that the biggest asset of the poor is his / her integrity
(imaan). By combining their integrity with capital (MUDRA), it would become the key to their
success - पपपपप पपपपप पप पपपपप. Speaking about women’s self help groups in
particular, the Prime Minister said that the kind of honesty and integrity showed by these loan
takers is seldom seen in any other sector.

The Prime Minister appreciated the efforts made by the banking sector of India in making Jan
Dhan Yojana a success. He said that he envisioned that within a year, banks would queue up to
give loans to MUDRA applicants. The Prime Minister also congratulated SIDBI on the silver
jubilee of its inception, and appreciated the work done by it in supporting India’s small scale
industry in these 25 years.

The Prime Minister said that MUDRA scheme is aimed at “funding the unfunded”. He said that
the small entrepreneurs of India are used to exploitation at the hands of money lenders so far, but
MUDRA will instil a new confidence in them that the country is ready to support them in their
efforts that are contributing so heavily to the task of nation building.

The Prime Minister also spoke about the possibilities of value addition in agriculture. He said
that, we must aim at creating a whole network of farmers engaged in value addition at the
community level. Brand building, advertising, marketing and financial support, when given to
such small entrepreneurs will strengthen the foundation of the Indian economy, he said.

The Prime Minister said that this will not entail any big changes in the existing structures, just a
little empathy, a little understanding and a little initiative. He urged the banks to study successful
models of microfinance, tailored to the local requirements and cultural contexts, which will be
enable us to help the poorest of the poor in a big way.

The Prime Minister said that mere launching of new schemes in not progress. Real success lies in
real change on the ground, as was seen in the Jan Dhan Yojana and PAHAL, which had
delivered concrete results within limited timeframes, he added. He said that the established
financial systems will soon move to the MUDRA-model of functioning, i.e. to support
entrepreneurs that give employment to a large number of people using least amount of funds.

The Union Minister of Finance, Shri Arun Jaitley, the Union Minister of State for Finance, Shri
Jayant Sinha, and the Governor of Reserve Bank of India, Shri Raghuram Rajan, were present on
the occasion.

***
MV
Pradhan Mantri MUDRA Loan Yojana (PMMY)

With the launch of much awaited Pradhan Mantri MUDRA Loan Yojana, the small and
independent entrepreneurs in India can now enjoy a sigh of relief as doors to myriads of financial
services open up for them. For eons, these small entrepreneurs have been struggling to get access
to banking system, loans, insurance and other financial products that are often considered the
backbone of any business.

Formally launched on April 8, 2015, the MUDRA Bank Yojana has opened its doors for these
small businesses. With a financial strength of ₹ 20,000 crores, the MUDRA Bank aims to serve a
behemoth pool of 5.77 crore small business that are currently engaged in a wide spectrum of
economic activities like retail, manufacturing, trading etc.

Referring to 2013 NSSO survey, PM Narendra Modi stated that these 5.77 crore small business
which are mostly proprietorship businesses employ 12 crore Indians as opposed to large
industries that absorb a meager 1 crore and 25 lakh pairs of working hands from Indian skilled
labor force. While that is a perplexing fact, Mr. Modi added to the surprise stating that these
small scale businesses absorb ₹ 11 lakh crores in funds for staying operational and in the process,
individual units operate with a small debt of ₹ 17,000 only.

The idea of MUDRA Bank Yojana, according to PM Modi, was born out of the statistical data
provided by survey reports. MUDRA, which stands for Micro Units Development and
Refinance Agency, aims towards providing the much needed financial support to these small
scale entrepreneurs, who according to PM, are key to continued growth and prosperity of Indian
economy. According to PM, integrity is the greatest asset of a poor man and when this integrity
is fused with MUDRA, Indian economy will experience never-before-experienced growth. He
cited example of women self-helpgroups in rural sectors and stated that these micro-business
groups show unparalleled integrity and honesty not seen in other business sectors in the country.

What Does MUDRA Bank Yojana Aim For?

MUDRA operateswith the following principal objectives which are:

 Stabilizing Indian’s microfinance sector via inclusive participation and regulation. This will
involve regulation of borrowers and lenders of microfinance.
 Aiding agencies and Microfinance Institutions (commonly abbreviated as MFIs) by extending
credit support. This will allow these MFIs and agencies to lend money to individuals, SHGs (self-
help groups), retailers and other small business.
 Maintaining a registered record of MFIs and agencies for the first time ever in history and
introducing an accreditation and performance rating system. With the new rating system, last-
mile borrowers will be able to evaluate the agencies or MFIs they approach for loans. Agencies
and MFIs with best track records will get edge over others. This method will thus ensure that the
lenders stay competitive and operate with best industry practices to stay in business. End result
is simple – borrowers emerge triumphant!
 Offering structured guidelines to borrowers to prevent business failure. These guidelines will
allow business owners to take necessary corrective steps in time in order to avoid catastrophic
losses that can eventually lead to defaults. On the other hand, MUDRA will also provide a set of
guidelines that lenders need to follow for debt recovery in case of defaults.
 Introduction and implementation of technological support that will help to streamline and
simplify lending and borrowing of capital. These technologies will also help to monitor the
proper usage of the capital that is distributed through MUDRA.
 Development of standard protocols that will, over time, become the last-mile business’
backbone.
 Developing a robust framework so that an efficient delivery system for last-mile credit to micro
and small businesses can be developed.

Will Pradhan Mantri MUDRA Bank Yojana Be Effective?

The two big questions that the Pradhan Mantri MUDRA Bank Yojana faces are:

 Will the scheme be effective?

 What kind of impact will it have on Indian economy?

Effectiveness of the scheme

Effectiveness of the MUDRA Bank Yojana can be gauged only after a certain period of time. It
is really difficult to say whether or not this scheme will succeed in the long run. Considering the
demography of India and the sheer number of underprivileged people living in the country, the
Yojana can make a good impact if properly executed.
As the scheme targets the section of the country that has long been cut off from mainstream
financial services, the possibility of engaging the target population is very high but there are
some challenges. Reaching out to underprivileged people, especially in villages is one big hurdle.

Their honesty and integrity of these people cannot be questioned but their lack of education and
reluctance to open up for new endeavors is a major concern. The government will need to work
at grass-root level, working directly with people and educating them about the benefits of the
scheme. Conventional advertisements like banners and hoardings will not work. Something that
captures the imagination of these village masses has to be implemented. It is not about offering
them a fish to eat. It is rather teaching people how to fish so that they never stay hungry.

Impact on Indian economy

Assuming that PM MUDRA Bank Yojana is implemented as envisioned, there will be series of
positive impacts on Indian economy which are listed below:

 Increased entrepreneurial success will immediately boost the GDP (Gross Domestic Product) of
demographic region where the businesses are located.
 Increased business success will mean increased employment and increased income, which in
turn translates into increased spending.
 More spending power in hands of general populace means increased demand for goods and
services.
 Increased demand in return stimulates the manufacturing segment of the economy and supply
of goods and services increases to meet the increased demand.

This creates a cycle where in business units and end users all benefit in form of increased income
and better lifestyle. Increased income in turn allows access to better health care facilities, better
education, better nutrition and more. As these aspects of life improve, work efficiency improves.
How? Proper medical care for instance will not only improve life expectancy of an individual but
will also help him/her to stay healthy and active. An active person performs better in challenging
work conditions than a person with poor health. Proper education on the other hand provides the
necessary knowledge and skills that can be put to use for finding better job opportunities.

Again, a business unit is not a standalone unit. It cannot survive on its own! For instance, if
MUDRA Bank Yojana helps self-help groups with finances, they can operate on larger scales.
Large scale operations in turn require more raw material input. This increased demand in raw
material will increase the activities in raw materials production sectors [in case of self-help
groups raw materials may include anything like cotton, jute, mud (usually needed for pottery),
dye, etc.] and hence increase employment in those sectors to meet the increased demand. Again,
increased supply of raw materials will require increase support from transport industry, transport
industry in turn will need more support from fuel industry.

Thus, the positive effects start propagating in every direction, creating a snowball effect of
sustained growth over time. Growth of indigenous businesses also improve GNP or Gross
National Product by a collective growth in GDP.
There is even more! For instance, increase in spendable income will mean increased revenue for
government in form of taxation. With increase in government revenue, reliance on foreign loans
(like loans from International Monetary Fund (IMF) or World Bank) will decrease significantly.
National debt will fall and government spending for infrastructural development will increase.
Improve infrastructure simply means, improved health care systems, improved education,
improved transportation etc.

So, if Pradhan Mantri MUDRA Bank Yojana succeeds, the whole economy will grow over years
and help India emerge as one of the most powerful economies in world.

Which sectors will be covered by MUDRA Bank Yojana?

To begin with, the Pradhan Mantri MUDRA Bank Yojana will target a few selected sectors that
include:

Sno Services

1 Land Transport.

2 Textile Products.

3 Food Products.

4 Social, Personal and Community Services.

Later, depending on the success of the scheme, more sectors will be included but that is not
going to happen anytime soon. At least a few years will be required to expand the scope of the
scheme.

What products are currently offered by MUDRA Bank Yojana?

Currently MUDRA Bank Yojana offers three distinct products which are:

 Shishu Scheme: This is targeted towards startups and sanctioned loan amount will be up to ₹
50,000. The idea is to provide enough financial support to cover the expenses for business set
up.
 Kishore Scheme:This is targeted towards already existing businesses that lack exposure. The
sanctioned loan amount will be between ₹ 50,000 and ₹ 500,000. This scheme will help
businesses to gain exposure by expanding their supply segment, which will in turn help to reach
out to more customers.
 Tarun Scheme: This is for those businesses which have grown to a certain level and have enough
exposure but need help to take the business to a new level. The sanctioned loan amount will be
between ₹ 500,000 and ₹ 1,000,000.

Please download Application form of PMMY Mudra Bank Shishu Form using this link
PMMY is officially going to be started from 25th September 2015 but will run till 2nd October
2015 only. Seems like this will be a trial run or the first phase. Each bank has been given the
quota to select borrowers. Bank manager has been given the task to identify the sectors which
they believe should be given loan.

Procedure to Apply Mudra Loan

You cannot apply Mudra Loan online, you have to walk down to each affiliated bank and explain
them your business. Those guys will them let you know if them can provide loan for your
business.

Other Schemes