Mudra Loans – “Funding the Unfunded” Start-ups
Everyone is talking about Mudra Bank and its loan schemes nowadays. Not sure what it’s all about? We’ll tell you.
It is an initiative by PM Modi for the economic development of the country. One of the biggest bottlenecks for SME’s in India is the lack of financial support from the formal banking or financial sector.
Finally this issue has been addressed!
MUDRA (Micro Units Development and Refinance Agency) Ltd is a financial body set by up the government to provide finance to micro units or entrepreneurs for their development and refinancing activities.
MUDRA, with a corpus of Rs. 20,000 crores, will offer up to Rs. 10 lakhs to small business units.
Types of Loan given under the MUDRA Scheme:
Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has already created its initial schemes. The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth and funding needs of the entrepreneur and also to provide a reference point for the next phase of growth to look forward to.
The financial limits for these schemes are:-
- Shishu: covering loans up to 50,000/-
- Kishor: covering loans above 50,000/- and up to 5 lakh
- Tarun: covering loans above 5 lakh to 10 lakh
Planning on grabbing this opportunity? Here is a list of some banks offering Mudra Loans:
- United Bank of India
- Union Bank
- Vijaya Bank
- Allahabad Bank
- UCO Bank
- Syndicate Bank
- Punjab and Sind Bank
- Oriental Bank Of Commerce
- Indian Overseas bank
- Indian Bank
- ICICI Bank
- IDBI Bank
- Dena Bank
- Central Bank of India
- Canara Bank
- Corporation Bank
- Bank of Maharashtra
- Bank of India
- Bank of Baroda
- Axis Bank
- Andhra Bank
- Punjab National Bank
- HDFC Bank
- State Bank of India
MUDRA is lending to small businesses at a current rate of 7%. The other banks offering rates are as follows:
- ICICI Bank – 6 %
- Corporation Bank – 11-11.9%
- HDFC Bank 11% – 13%
- PNB – 11%- 12.5%
- IDBI – 11%
This is definitely a much-needed and helpful step towards easier financing for start-ups in India. Going by the flow of things, Indian entrepreneur can expect the construction of a more conducive start-up environment in the near future as well.
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