5 facts you must know for eligibility of mudra loan

After the coronavirus pandemic and a whole year of lockdown, people finally understood the need of going digital. It’s not a hidden fact that many people lost their jobs, so a whole new set of start-ups developed. And a start-up starts with the availability of capital or investment. A hefty amount of investment arises if one is willing to take loans. There are various types of loans given according to different criteria to different people. But talking more generally, let us consider the majority of the population, i.e., the small-scale business owners. They are provided with the MUDRA loan which stands for Micro Units Development and Refinance Agency. Furthermore, let us discuss the Mudra loan Eligibility criteria in the following:

1. To receive a MUDRA loan a business firm must have a vintage of 1 year and its minimum monthly sales should be above 2 lacs.
2. The candidate must have the minimum required documents available with them which include:
   1. Personal KYC: PAN Card.
   2. Residential Address Proof that includes either of any:Aadhar Card/ Passport/Ration Card/Voter ID/Driving License/Rent Agreement.
   3. Business KYC (Any One): Business PAN Card/Shops and Establishment Certificate/GST Registration Certificate.
   4. Bank statements of the previous six months from the candidate’s current account.

3. Different types of MUDRA loans are given based on the size of the candidates’ business. There are mainly 3-types of MUDRA loans:
   1. Shishu Mudra Yojana: These loans are given to candidates that are just starting their business or are at the early stages of their business.
   2. Kishore Mudra Yojana: These loans are provided to candidate that already had an existing business and requires capital to sustain themselves in the market.
   3. Tarun Mudra Yojana: these loans are mainly assigned to the ones who are planning to expand their business or are planning to shift from small-scale to large-scale business entrepreneurs.

4. The small-scale business that is categorized or eligible for MUDRA loans are:
   1. Transport Vehicles that are the vehicles used for the transportation of goods and passengers are covered here.
   2. Social and Personal Services include Personal consumption services, like gyms, parlours, medicine shops, tailoring, dry cleaning shops, etc.
   3. The food Sector includes basic food services like food stalls, achaar-papad making, catering services, food preservation, cold storage, etc.
   4. Textile: Embroidery, apparel designs, handlooms, power looms, knitting, job works, etc.
   5. Traders and Shopkeepers include individuals running shops for trading and business purposes.
5. These loans can go up to as much as ten lacs based on the size of the business and the candidate’s planning on how to run the business.

Conclusion:

So, the Mudra loans and many other such loans are generated keeping in mind the need of the small-scale or micro industries. These types of loans are termed MSME (Micro small and medium enterprises) loans. These loans can range from around 50,000 up to 10 crores. So, msme loan for new business is easy to acquire from the bank if the candidate has all the relatable documents required for opting for such loans.