The formation of the Micro Units Development and Refinance Agency (MUDRA) was announced in 2015 to help micro and small enterprises grow and thrive by making credit more accessible.
The Pradhan Mantri Mudra Yojana (PMMY) was launched alongside MUDRA with the aim of “Funding the Unfunded”. Under this scheme, entrepreneurs and small businesses can apply for collateral free loans of up to Rs 10 Lakh.
To make them accessible across the nation, these loans can be applied for online as well as offline. The online Mudra loans are known as e-Mudra or digital Mudra loans.
If you’re wondering what these include, we’ve got you covered. Here, we explore e-Mudra loans, their benefits, eligibility criteria, e-Mudra loan online applying process, and more.
What is an e-Mudra Loan?
A PMMY scheme loan applied for online is known as an e-Mudra loan. For these loans, applicants must start and complete the entire application process online. There are three categories of loans that applicants can apply for. These include:
1. Shishu Loan:
The maximum loan amount under this category is Rs 50,000. These loans are best for start-ups and new businesses that need financial support to begin operations.
2. Kishore Loan:
The maximum loan amount under this category is Rs 5 Lakh. These loans are best suited to meet expenses arising from business expansions and big-ticket purchases such as machinery and equipment.
3. Tarun Loan:
The maximum loan amount under this category is Rs 10 Lakh. These loans help meet the financial needs of established enterprises.
Benefits of Applying for an e-Mudra Loan
E-Mudra loans help busy entrepreneurs and business owners access credit without wasting time. All they have to do is access the requisite website, fill in the form and upload the required documents.
But apart from its convenience, applying for an e-Mudra loan has several other benefits as well. These include:
1. It helps entrepreneurs access loans up to Rs 10 Lakh without any collateral.
2. Several PMMY-authorised financial institutions don’t charge any processing fee if the e-Mudra loan is below Rs 5 Lakh.
3. The borrower can repay the e-Mudra loan comfortably over a tenure of five years, depending on loan size and eligibility.
4. The interest rates charged on e-Mudra loans are substantially lower than those charged on standard business loans.
5. The e-Mudra loan can be used for a variety of purposes, ranging from starting a business and meeting day-to-day expenses to business expansion and big-ticket purchases such as office space, machinery, etc.
6. The eligibility criteria for an e-Mudra loan are easier to meet than the eligibility criteria for standard business loans.
Who Can Apply for an e-Mudra Loan?
For a smooth and successful e-Mudra loan application process, applicants must meet the following eligibility criteria:
1. The applicant must be between 18 and 65 years of age.
2. The applicant can be an entrepreneur, a new business or an existing business.
3. The loan must be required for business purposes.
Be sure to check the eligibility criteria on your chosen PMMY-authorised financial institution’s official website for a hassle-free experience.
E-Mudra Loan: Documents Required
You must furnish all required documents along with the application form for a smooth process. While these might vary with financial institutions, here is a general list:
1. KYC documents such as Passport, Voter ID card, Driving License, Aadhaar card, Utility Bills (water or electricity), and PAN card
2. Documents in case the applicant belongs to SC/ST/any other special category
3. Income proof
4. Address proof
5. Bank statement for the last six months
6. Business establishment certificate
7. Proof of continuity of business
8. Any other documents required by the financial institution
How Can You Apply for an E-Mudra Loan?
You can apply for an e-Mudra loan through the Udyami Mitra Portal as well as through a PMMY-authorised financial institution. Here are the steps to follow when applying through the former:
Step 1: Visit the official Udyami Mitra website.
Step 2: Click on “Apply Now”.
Step 3: Click on “Category of Borrower” and specify whether you’re a new entrepreneur, existing entrepreneur, or self-employed.
Step 4: Fill in your name and contact details, such as number and email address. After this, click on “Generate OTP”.
Step 5: After filling in the OTP that you received on the mobile number you shared, your registration on the Udyami Mitra portal will be complete.
Step 6: Fill in your personal and professional details next.
Step 7: Click on “Apply Now” under “Loan Application Centre”.
Step 8: Now, choose between the three loan categories: “Shishu”, “Kishore”, and “Tarun”, depending on your loan amount and purpose.
Step 9: Next, fill in your business details, including information on proprietors, directors, existing credit facilities, estimated working capital, credit report, etc.
Step 10: Attach all required documents and click on “submit”.
Step 11: You will be directed to a declaration page. Here, tick the necessary boxes and your application process is complete.
Alternatively, you can also apply for e-Mudra loans through a PMMY-authorised financial institution. Here are the steps to follow in this case:
Step 1: Download the loan application form by visiting the official website of the chosen PMMY-authorised financial institution.
Step 2: Complete the downloaded e-Mudra application form with all required details. Be sure to fill in accurate and updated information for a hassle-free process. Next, attach all required documents.
Step 3: Submit the duly filled application form online on the website of the PMMY-authorised financial institution from where you downloaded the application form. You will receive a reference ID or number after it is submitted successfully.
Step 4: Once your application form and attached documents are verified by the financial institution, the e-Mudra loan amount will be disbursed directly into your account.
Parting Thoughts
E-Mudra loans empower small businesses and entrepreneurs to access credit without having to step out of their offices or stand in serpentine queues at physical branches of financial institutions. With a smooth online e-Mudra loan applying process, applicants can now apply and track the status of their applications right from their devices.
However, e-Mudra loans offer credit up to Rs 10 Lakh only. If you’re in need of additional funds to give your business aspirations solid backing, consider applying for a business loan with Tata Capital.
We at Tata Capital offer loans with flexible tenures, attractive interest rates, quick approvals and without any collateral. Not only that, but you can also benefit from our convenient EMI calculator to help you plan your repayment schedule with ease.
To learn more about Tata Capital business loans, visit the Tata Capital website or download the Tata Capital App now!
29 April 2024
6 mins read
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