MUDRA Loan Eligibility Criteria 2022

The MUDRA scheme was launched on the 8th of April, 2015 by the Hon’ble prime minister.  It’s a flagship scheme of the Government of India to “fund the unfunded” by offering them affordable business loan up to Rs 10 lakh. However, people are willing to take MUDRA loan, but due to lack of knowledge about the eligibility criteria, people don't feel getting it. First of all, the borrower should know that MUDRA is an NBFC set up by the India government to develop micro sector enterprises. Small scale businesses that do not have to the access to the formal channel of borrowing can be benefited from MUDRA. As per MUDRA official website, more than 90% of the non-corporate small businesses (NCSB) sector don’t have access to formal sources of finance. Since MUDRA provides refinance support to the various bank to give loans to the borrower, so before checking the MUDRA loan eligibility criteria, first, check which financial institutions are chosen to lend MUDRA loans.

Read More: SBI MUDRA Loan

Since MUDRA loans are provided in three different categories, you need to choose the best suitable class according to your need.

• Shishu:  Loans Up to Rs 50,000/-
• Kishor:  Loans above Rs 50,000 and up to Rs 5 lakh.
• Tarun:  Loans above 5 lakh and up to Rs 10 lakh.

Sectors Eligible to Take MUDRA Loan

Once you choose the loan amount, kindly check that if your profession is covered under the MUDRA loan scheme or not. Currently, the government providing credit cover to four sectors which are:

• Land Transport Sector/ Activity: Under this category, you can get financial assistance to purchase commercial vehicles such as auto rickshaw, small goods transport vehicle, three-wheelers, e-rickshaw, passenger cars, taxis, etc. for carrying goods or passengers.
• Community, Social & Personal Service Activities: The financial support is extended to set-up and grow saloons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shop, DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc.
• Food Products Sector:  This category offers financial inclusion for businesses like papad making, achaar making, jam/jelly making, agricultural produce preservation at rural level, sweet shops, small service food stalls and day to day catering/ canteen services, cold chain vehicles, cold storages, ice-making units, ice cream making units, biscuit, bread and bun making, etc.
• Textile Products Sector/ Activity: The main aim of this sector is to revive the activities such as handloom, power loom, chikan work, zari and zardozi work, traditional embroidery and handwork, traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non-garment products such as bags, vehicle accessories, furnishing accessories, etc.

Eligible Borrowers Under Mudra Loan Scheme

• Individuals 
• Proprietary Concern
• Partnership Firm
• Private Ltd. Company
• Public Company
• Any Other Legal Forms

• The applicant should be an Indian citizen.
• The applicant should not be a defaulter to any bank or financial institution.
• The candidate should have a satisfactory credit track record.
• The individual borrower should possess the necessary skills/experience/knowledge to carry out the business activity successfully.

Shishu Category

• Proof of personal Identity: A self-certified copy of Voter's ID card/ Driving License/ PAN Card/ Aadhar Card/ Passport/ Photo Ids, issued by Govt. authority etc.
• Proof of residence: Recent telephone bill/ Electricity bill/ Property tax receipt/ Voter’s ID card/ Aadhaar card/ Passport of Individual/ Proprietor/ Partners, Certificate issued by Govt. Authority/ Local Panchayat/ Municipality etc.
• Applicant's two recent photographs not older than six months.
• Proof of SC/ST/OBC/ Minority, if applicable.
• Proof of business identity: Address of the business enterprise, if available
• Six months account statement of the current bank account
• Quotation of the machinery/equipment that to be purchased.

Kishore/Tarun Category

• Proof of personal Identity: A self-certified copy of Voter's ID card/ Driving License/ PAN Card/ Aadhar Card/ Passport/ Photo Ids, issued by Govt. authority etc.
• Proof of residence: Recent telephone bill/ Electricity bill/ Property tax receipt/ Voter’s ID card/ Aadhaar card/ Passport of Individual/ Proprietor/ Partners,Certificate issued by Govt. Authority/ Local Panchayat/ Muncipility etc.
• Applicant's two recent photographs not older than six months.
• Proof of SC/ST/OBC/ Minority, if applicable.
• Address of Business: Copies of relevant licenses/registration certificates/ lease or rent agreement/ Other documents about the ownership, identity of the address of business unit/ Udyog Aadhaar Memorandum.
• Six months Account statement of the current bank account
• Last two years unaudited balance sheets of the existing units, along with income tax/ sales tax returns etc. (Only applicable for the loans of Rs 2 lakh and above)
• Projected balance sheets of the start-ups/ existing units for one year, in case of working capital limits and for the period of the loan in case of term loan (Only applicable for the loans of Rs 2 lakh and above).
• Sales achieved during the current financial year, up to date of submission of the application (in case of existing units).
• Performa invoices/ Quotation for the assets to be purchased and estimates for the civil works (if needed).
• Asset & Liability statement of the borrower including, Directors & Partners.
• Memorandum and articles of association of the company/partnership deed of partners, etc., if applicable.
• Two photos of applicant /proprietor/ partners/ directors not older than six months.

Note: Additional Documents May Be Asked as Per the Requirement of Each Case. 

• The MUDRA loan can be availed in the form of term loan (repayment is EMIs)/ overdraft (OD) and cash credit (CC) (funds available on demand for a shorter repayment tenure).
• Mudra loan is extended by the banks (all branches)/ NBFCs/ MFIs.
• For working capital limit, you can get recently launched “MUDRA Card”. It’s a debit card issued on RuPay platform.
• Under MUDRA loan scheme the highest amount of Rs 10 lakh can be availed.
• The banks decide the interest rates as per their policy, but the MUDRA ltd ensures that the interest rates should be reasonable.
• The bank may charge a marginal amount as a processing fee. However, most of the banks have waived processing charges for Shishu loans.
• As per the Master Circular on lending to MSME Sector (para 4.2) dated July 01, 2014, for loans up to Rs 10 lakh banks are not mandated to accept collateral security. In fact, banks have to encourage their branch level functionaries to avail of the Credit Guarantee Scheme cover (whenever required).
• The maximum tenure of the Mudra loan is 36 months.

• Select the category in which you require MUDRA loan (refer types of MUDRA loan).
• Check your eligibility (refer eligible borrower section)
• Approach any financial institution (refer to the list of partners table) who is qualified to extend MUDRA loan. It is advisable to apply for it with your existing bank.
• Collect all your documents required to apply for MUDRA loan (refer to the list of necessary documents).
• Fill the MUDRA loan application form and annex essential documents with it.

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