MUDRA Loans are micro loans made available through the Pradhan Mantri Mudra Yojana (PMMY) to the MSME sector to meet their liquidity requirements. This is a credit support to small businesses in the non corporate sector to start a new business or capital for expansion of existing businesses.
In order to obtain a Mudra loan, the primary and essential requirement is to submit a Project Report to the Bank during the application process. The Project Report should include all business-related financial, economic, managerial, technical aspects of the project or business and it should be complete and Contains valid data that is readily accepted and approved for loan sanctioning under PMMY.
A project report is a document that contains information about the business. The report provides a thorough cost-benefit analysis of the requested business loan. It presents detailed information about the project's cost, proposed and existing activities, existing debt (if applicable), revenue projections, and more.
MUDRA loan scheme categories
1. Shishu: loans up to 50,000/-
Kishor: loans over 50,000/- and up to 5 lakhs
Tarun: Covers loans ranging from 5 lakh to 10 lakh.
If the business unit is already in existence or has a shop/building for carrying out the anticipated business at the time of application, the chances of receiving a mudra loan improve.
Documents required
Mudra Loan Application
A one-page application for a loan through the Shishu plan
A three-page loan application under the Kishor and Tarun Scheme
Identity proof — a self-certified copy of a voter’s ID card, a driving license, a PAN card, an Aadhar card, or a passport.
Proof of Residence – A recent telephone bill, an electricity bill, a property tax receipt (no more than two months old), a voter’s ID card, an Aadhar card, and the passport of the proprietor/partners/directors.
Proof of SC/ST/OBC/Minority status.
Proof of Business Enterprise Identity/Address -Copies of applicable licenses/registration certificates/other documents about the business unit’s ownership, identity, and address.
The applicant must not be a defaulter in any bank or financial institution.
Account statement (for last six months) from the current banker, if any.
Unit balance sheets for the previous two years, returns on income tax and sales tax, for example (Applicable for all cases from. Rs. 2 lacs and above).
Balance sheets are projected for one year in the event of working capital constraints and the life of the loan in the case of a term loan (Applicable for all cases from Rs.2 Lacs and above).
Sales made during the current fiscal year up to the date of application submission.
A project report (for the proposed project) covering technical and economic viability aspects.
Memorandum and articles of incorporation of the company/Partnership Deed, etc.
In the absence of a third-party guarantee, the borrower’s asset and liability statement, including Directors and Partners, may be requested to determine net worth.
Photographs of the Proprietor/Partners/Directors (two copies).
