Brief description of 'Mudra Loan Scheme'
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Dear Members,
Many of our friends frequently inquire about different aspects of Mudra Loans under Pradhan Mantri Mudra Yojna. Though they have already gone through the details of this scheme, a few aspects remain unclear due to lack of proper guidance. So, to facilitate them, I have compiled the major aspects of this scheme which our young members should keep in mind while approaching a bank/FI for a credit facility for their clients.
1. This scheme is available only for micro units defined under Micro, Small and Medium Enterprises Development Act, 2006 (which I had explained in detail a few days back). It means the scheme is not available for a unit which has been upgraded under Small category.
2. Loan can be granted only for income generating activities. It means loan can not be granted for activities that don't generate income like for social service or charity etc. Also, loan can not be granted for personal purpose or for consumption such as for marriage or for medical treatment or for purchasing of property or for purchasing of household items etc.
3. Only non-farm activities can be considered under this scheme. It means any activity that can be classified under direct or indirect agriculture can not be considered for a Mudra loan.
4. All kind of activities- manufacturing, service and trading are eligible for finance.
5. Any legal entity can avail this loan. Even a public company can avail this loan.
6. Purpose- the loan can be granted for acquiring of capital assets or for working capital or for marketing related expenses.
7. The borrower must possess necessary education/skills/training etc. required to undertake the activity for which loan is sought.
8. The credit facility can be in the nature of term loan or working capital loan or a composite loan.
9. Maximum tenor for repayment of term loan is 36 months.
10. Collateral can not be taken by the bank.
11. Loans upto a maximum limit of Rs. 10 lacs only can be sanctioned under this scheme. For shishu units- upto Rs. 50 thousand, for Kishor units- upto Rs. 5 lacs and for Tarun units- upto Rs. 10 lacs.
12. Be clear that these three are not the slabes of loans but the stages of development/growth of the units. It means, ideally, for a starting unit, loan upto Rs. 50,000 only can be granted as it is a shishu unit just started operations.
13. The borrower must not have defaulted earlier to any bank/FI.
Any query from any member on this subject is welcome.
CA Mahesh Bansal
9716263569
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