If you want to start your own small business, but you are short of money, then the government’s ‘Pradhan Mantri Mudra Yojana’ (PMMY) can become a great source of help for you. This scheme, which started in 2015, has now completed 11 years and has given lakhs of people the opportunity to start their own businesses. The most important thing about this scheme is that one can get loan without any guarantee or previous credit history. Under this scheme, you can take a loan up to ₹20 lakh. So let us know who can take advantage of this scheme and how to apply for it.
Four main categories of loans
The government has divided this scheme into four different parts, so that people of every level can get loans easily.
baby category
Under this category, loans up to ₹50,000 are given. It is for those who want to start a brand new business—like a small shop, a stall or a service-based business.
teen category
Loans ranging from ₹ 50,000 to ₹ 5 lakh are available in this category. This is for those people whose business is already running and who need money to further expand their business.
young category
Loans ranging from ₹5 lakh to ₹10 lakh are available under this category. Its objective is to make the growing business bigger and expand it.
Tarun Plus
This is a new category in which loans ranging from ₹10 lakh to ₹20 lakh are available. This is especially given to those people who had earlier taken a loan under this scheme and had repaid it on time.
Who can get the benefit?
Small shopkeepers, artisans and people associated with the service sector—like salon owners, repair shop owners, vegetable sellers, truck or auto-rickshaw owners, etc.—can avail the benefits of this scheme. The biggest relief of this scheme is that you do not need to give any kind of guarantee or collateral to take a loan.
Who is not eligible for the loan?
If a person has never repaid a loan before (has defaulted) or his CIBIL score (credit rating) is very poor, the bank has the right to reject his loan application. Furthermore, it is important to note that the amount received from this loan can be used only for business purposes.
how to apply?
To avail Mudra Loan, you have to visit your nearest bank branch. There, you have to fill a form and submit the required documents—such as your Aadhar card, PAN card, proof of identity, and business details. The bank approves the loan depending on the nature of your business. Therefore, if you have any business idea of your own, then this scheme can prove to be a golden opportunity for you.
