We have one more scheme to get the unbanked population into the banking cap by the Government of India– The Pradhan Mantri Mudra Yojana. It enables a borrower to borrow from all public-sector banks such as PSU banks, Regional Rural Banks and cooperative banks, Foreign Banks and Non-banking Finance Companies (NBFC) for a loan of up to Rs. 10 lakh only and that too for activities that can generate income out of the farming sector.
Any individual including women, proprietary concern, firm, private limited company, or any other entity is an eligible applicant under PMMY loans. But the thing to be kept in mind is only the one who has a business plan for a non-farming sector income generating activity such as trading, manufacturing, processing, or service sector.
The purpose of the scheme is to initiate start-ups and businesses encouraging young minds of our country to think outside of the box and come up with something innovative and more in-demand.
There are three different types under this yojana-
The loan should be paid back in a maximum of 36 months in case of a demand loan and 84 months in case of a term loan including the delay time. Moreover, the interest is to be paid as and when charged by the loan providing bank.
Collateral Security -
The interest rate is not fixed and would depend on the type of your business and the bank you are taking a loan from. Moreover, the government may provide some subsidies, but the percentage is still not declared. We will keep you updated regarding the changes if any.
Borrowers, who want to have any help under Pradhan Mantri MUDRA Yojana (PMMY), can approach the local branch of any of the financial institutions in their region - PSU Banks, Regional Rural Banks, and Cooperative Banks, etc. Then you will have to fill in the Mudra form.
You will have to supply the bank with your proof of Identity and Proof of Residence along with two passport size photographs and the details of your business. Then the process to provide a loan will be initiated.
Having an account with the bank will make the process very easy.
So, People who are aiming to get themselves out of the farming sector and have some idea in mind to earn money with a new business plan should be looking up to this scheme. The scheme can provide them with easy loans and thus they can kick-start their business.