4 Most Common Reasons You Should Apply for Mudra Loan Scheme

In India, you will find numerous entrepreneurs who do not have proper access to formal borrowing channels. In that case, the Mudra loan scheme plays a significant role. The borrower’s eligibility to use the loan amount under the Pradhan Mantri Mudra Yojana scheme is categorized into three categories. 

The Shishu, Kishore, and Tarun schemes are three under the Pradhan Mantri Mudra Yojana. These schemes or classes help every entrepreneur and start-up business owner to grow their business. Besides, these schemes also support the existing business owners to expand their business further. There are various benefits that one can have while availing of the Mudra loan.

Mudra scheme is one of the significant schemes for any medium and small business enterprise.

How to find working capital?

If anyone is looking for how to find working capital, they must choose the Mudra loan for their medium and small enterprises. It helps to offer financial literacy and various social support services by providing financial assistance. Besides, the loan empowers every MSME enterprise involved in trading, services, manufacturing, agriculture, and other allied activities.

Benefits of Mudra scheme

The Mudra scheme offers various benefits to medium and small business enterprises. It helps these businesses to expand and grow. Some of the benefits of such a scheme include:

• Since it is an unsecured loan, therefore, the borrowers need not have offered any collateral
• The service provided by such a scheme does not involve any hassle
• This loan is favourable for any micro firm or small firm
• One can utilize the loan for any e multipurpose reason.

Advantages of the Mudra scheme

The Mudra scheme happens to offer various advantages to medium and small enterprises. These are:

• One did not require any collateral to get this loan. Hence, a person does not have to lose their business property or personal property in case of any problem.
• In case of default, the government takes responsibility for paying off the loan amount.
• The entrepreneurs get the benefit of this loan to set up their medium or small enterprises.
• One can use the fund to expand and develop their business.
• The scheme is available for small business owners who are residing in any rural and urban region.
• Women borrowers tend to get better benefits than male borrowers because of the lower interest rate.
• One can extend the tenor of this loan for at least seven years.
• Once you take the loan amount, you can help the business with the working capital needs.
• The process of application and approval happens to be an instant one.

The salient feature of Pradhan mantri Mudra Yojana

There are some salient features of the Pradhan Mantri Mudra Yojana. These features are stated below:

• The loan schemes happen to be categorized into three methods, namely Shishu, Kishore, and Tarun. The loan amount for these categories happens to be 50,000 rupees, five lacs and ten lacs rupees, respectively.
• The scheme tends to offer reasonable and affordable interest rates up to 12.45 per cent.
• One can charge a nominal processing fee for the Yojana.
• Most lenders tend to waive off the fee in the case of the Shishu category.
• The repayment tenor of this loan happens to be a fixed one. It depends upon the cash flow capacity and the assets of the business.

One can get the loan after qualifying the essential eligibility criteria. You can easily take a loan amount up to Rs. 45 lakh without any collateral. If you are planning to start your start-up business, you can take the help of this loan to get new age and modern infrastructure for your medium or small enterprises. One can even take up the financial aid to upgrade the machinery.