What are the Benefits of an e-Mudra Loan?
MSMEs play a significant role in the development of the country’s economy. However, these sectors find it hard to sustain due to the absence of credit facilities. To combat such a situation and revitalise the Indian economy, the Government of India launched the Pradhan Mantri Mudra Yojana.
The e-mudra loan is a component of the PMMY (Pradhan Mantri Mudra Yojana). It is also a part of the digital India initiative of the Indian Government. The amount obtained under an e-mudra loan can be used to start a venture, expand a business’s horizon, meet a business’s working capital requirements, etc.
Benefits of Availing an e-Mudra Loan
Here are the benefits that individuals will be able to reap under the e-mudra loan:
- Individuals do not have to pledge any collateral for availing the loan amount.
- Entrepreneurs or established business owners can access loan amounts of up to Rs. 10 Lakhs.
- The loan principal under the Mudra Yojana scheme can be availed by both urban and rural small businesses.
- With the availability of e-mudra loans, it has become convenient for business owners to meet working capital demand.
- Individuals can repay loan amount over a period of 5 years. Additionally, individuals do not have to bear any processing charge.
- As Pradhan Mantri Mudra Yojana is a part of Pradhan Mantri Jan-Dhan Yojana, individuals can reap overdraft facility balance benefits, up to Rs. 5000.
- The loan amount can be availed by individuals from the trading sector, part of business enterprises and individuals who are related to agricultural activity.
Documents Required to Apply for an e-Mudra Loan
Individuals must keep the following document for a Mudra loan handy:
- Identity proof (PAN card, Aadhaar card, driving license etc.)
- Address proof (Aadhaar card, power bill etc.)
Individuals will also have to submit the following documents authenticating the existence and finance of the business.
- Proof of income
- Address proof of business
- Business registration certificate
- Total business experience
- Income Tax Returns (ITR) for previous two years
- Bank account statements for past 12 months
- DIN (Director Identity Number)
- Sales record of present financial year
- MOA (Memorandum of Association)
- An unaudited balance sheet of the previous year
How to Apply for an e-Mudra Loan
An aspiring entrepreneur or established business owner can opt for an e-Mudra loan from the official website of the financial institution that offers the credit facility. Furthermore, one can also apply for an e-Mudra loan from the dedicated Udyami Mitra portal.
Here are the steps that will help one avail e-Mudra loan from the Udyami Mitra portal:
Step 1: Firstly, visit Udyami Mitra official portal and select ‘Apply Now.
Step 2: Choose ‘Category of borrower’ on the redirected page. Individuals must mention whether they are existing, new, or self-employed.
Step 3: Provide name, email address and mobile number and select ‘Generate OTP’ to proceed.
Step 4: Enter the OTP on following page. Complete the verification process by clicking on the ‘Verify OTP’ button. Individuals will be registered successfully on Udyami Mudra Portal after completing the process.
Step 5: On the page that will appear next, mention personal and professional details.
Step 6: Under ‘Loan Application Centre’, click on ‘Apply Now tab.
Step 7: Choose among the different schemes to get desired loan amount. For example, choose’ Shishu’ for an amount of Rs. 50,000. For loan principal ranging between Rs. 50,000 and Rs. 5 Lakhs, choose ‘Kishor’ and for loan principal between Rs. 5 Lakhs and Rs. 10 Lakhs, choose ‘Tarun’.
Step 8: Provide basic business details after choosing desired scheme.
Step 9: Next, individuals will also have to provide the following information:
- Details about business
- Information related to proprietors and business directors
- Name of concerned associate and nature of association (in terms of existing credit facilities)
- Statutory obligation status
- Evaluation of future working capital
- Details regarding the machinery must be provided if the individual is availing of the credit for starting or expanding their business.
- Preferred lender (Individuals must mention the name of the specific financial institution from where they want the loan amount to be processed.
Step 10: After providing the necessary information, click on ‘Submit’.
Step 11: When redirected to the declaration page, individuals must tick the appropriate box to complete the application process.
On successful application for e-mudra loan, a message stating the loan application number will be displayed on the screen. One must keep this number for future reference.
To sum up, an e-mudra loan is an effective online financing choice that empowers MSME entities and entrepreneurs. With rapid digitisation in all sectors, it has become feasible for budding entrepreneurs and business owners to avail of lump sum funds under the PMMY and establish their businesses. The scheme was implemented to fund and support small entrepreneurs from collapsing.