There has been a drastic increase in the number of businesses and startups over the past few years. Many of these small and micro businesses require capital to meet their business requirements. As a result, the government launched the PM Svanidhi Scheme to provide financial support for the economically weaker population by providing loans up to Rs. 10,000. In addition, the PM Mudra Yojana scheme also provides loans ranging from Rs. 50,000 up to Rs. 10 Lakhs. The PMMY scheme is aimed to provide a benefit of Rs. 9.37 Crores on the whole. There are no interest charges for capital up to Rs. 50,000. Under the PM Svanidhi Scheme, the government plans to provide a subsidy of 7% in the annual rate of interest. This scheme is expected to be in force until the 31st of March 2020.
Features and Benefits of Mudra and E-Mudra Loan
There are plenty of benefits offered by the mudra loan and e-mudra loan. Here are some of the key features and benefits.
E-Mudra Loan
- The rate of interest varies between 8.4% and 12.35% per annum for the e-mudra loan.
- The repayment tenure is flexible and varies between 12 months and 60 months.
- Micro and small enterprises that are new or existing businesses can avail of the e-mudra loan.
Mudra Loan
- The loan repayment period is between 3 and 5 years.
- All working capital requirements can be met using the mudra loan.
- Both existing and new businesses can apply for the mudra loan.
Types of Mudra Loans
There are 3 main types of mudra loans that are offered under the PMMY scheme that has been initiated by the government. Let us have a look at each one of them.
| Name of the Loan | Shishu Loan | Kishore Loan | Tarun Loan |
| Type | Term loan | Term loan or working capital loan | Working capital loan or term loan |
| Repayment Tenure | 6 – 12 months | 12 – 36 months | 12 – 60 months |
| Margin Amount | No margin amount | 10% | 10% |
| Amount of Loan Provided | Up to Rs. 50,000 | Between Rs. 50,000 and Rs. 5 Lakhs | Between Rs. 5 Laksh and Rs. 10 Lakhs |
| Collateral Requirement | None | None | Receivables, Stock, Plan, and machinery hypothecation |
| Processing Fee | No processing fee | No processing fee | Taxes + 0.5% of the loan amount |
Eligibility Criteria for Mudra Loan
Under the PMMY scheme, the following list of businesses and MSMEs (Micro, Small, and Medium Enterprises) can apply for the mudra loan.
- Artisans
- Shopkeepers of small shops
- Small manufacturers
- Individuals in the agricultural sector
- Vegetable and fruit sellers
However, more businesses are eligible to apply for the mudra loan through Finserv MARKETS such as the following.
- Tailor shops
- Photocopy shops
- Vehicle repair shops
- Courier agencies
- Gymnasiums
- Beauty parlors
In a Nutshell
Both PM Mudra Yojana and PM SVANidhi Yojana schemes can help startups finance their businesses and expand further. You can apply for the mudra loan scheme that is facilitated through Finserv MARKETS in a simple method. In addition to ease, there are several benefits offered by Finserv MARKETS such as flexible repayment tenure and increased eligibility criteria.
