Eligibility Mudra Loan
The Mudra Loan Yojana is designed to fund the micro and small businesses in India which are in desperate need for monetary aid for startup, establishment and expansion. The scheme has been restricted only and only to these micro and small business units because they form the informal employment sector of the country and are known for employing lion’s share of India’s working population.
Eligibility based on category of Mudra Loan
Mudra loan is available in 3 different categories: Shishu loan, Kishor loan and Tarun loan. However, not everyone can apply for any category on whims. Let us take a tabular look at who are eligible for each category of the loan:
|Category Name||Loan Amount||Eligible Business|
|Shishu loan||Up to INR 50,000||Only startup businesses|
|Kishor loan||Between INR 50,000 and INR 500,000||Only businesses that have already started up but need financial aid for establishing.|
|Tarun loan||Between INR 500,000 and INR 10,00,000||Only business that are already established but require funds for expansion|
Eligibility in terms of business type
There is another glitch. Not all business types that fit within the categories of Mudra loan are allowed to apply. Only those business that are non-farm by nature and generate income are allowed to apply for loan under the Mudra Scheme. In order to avail the loan, a business should belong to any one of the undermentioned types:
- Abusiness should be a small manufacturing unit or,
- The applicant should be a shopkeeper or,
- The applicant should be an artisan or,
- The applicant should be a vendor of vegetables and fruits.
Eligibility for lending institutions
Since Mudra itself is not a bank, the loans under Mudra scheme can be availed only through banks and other lending institutions. However, the government has laid down strict conditions for any organization that wants to participate in this scheme and forward loans under this Yojana. The types of organizations that are allowed to participate include:
- Banks in public sector
- Banks in private sector
- State operated cooperative banks
- Rural banks from regional sector
- Institutions offering micro finance
- Financial companies other than banks
The aforementioned institution types can participate in lending operations under the Mudra scheme only if the satisfy the following criteria:
- Organizations must be making profits for 3 consecutive years.
- Organizations must maintain a CRAR of 9% or more.
- Organizations must maintain NPAs of not more than 3%.
- Organizations must have INR 100 crores of net worth.
That’s more or less the eligibility criteria for lenders and borrowers under the Mudra Scheme.