Pradhan Mantri Mudra Loan Yojana in SBI (2018)
The Modi government has always maintained that it is important to provide the small business owners with proper monetary support. Without this, the industries will not be able to flourish. Most of the people, associated with the small industries do not have any bank accounts. With the help of the Pradhan Mantri Mudra Yojana, the Prime Minister has taken an initiative of bringing the backwards and poor people within the system. The main motto of the scheme is to “Fund the Unfunded.” Under the scheme, the small businessmen will be able to take a loan from the banks and utilize it for betterment in the business.
The government has selected most of the government and the private banks for assisting the people in making the loans available. With accordance to the various guidelines of the PMMY, SBI or the State Bank of India has come forward to assist the common people in the country in getting access to the loans.
Mudra Loan Yojana from SBI
As the percentage of small businessmen is high in the country, it is important that their economic demands are adequately met. State Bank of India is the biggest commercial institutes in the country, catering to the needs of the teeming millions. The bank is going to take part in the Mudra Loan Yojana as well.
Under the scheme, the bank will provide a loan to small businessmen. This money can be used for the betterment of the business. As per the scheme, SBI will be granting microloans to the small scale business owners. The beneficiaries will get a loan ranging from 50 thousand to 10 lakhs. The scheme is supposed to benefit more than 58 million medium and small scale business owners.
Overview of Mudra Loan
Here, you will get a clear idea about the three basis kinds of loans that the SBI will offer the medium and small sized business owners:
- 1. Shishu Loan Details – Under this scheme, the person will be able to apply for a loan of a maximum of Rs. 50,000. The loan will be given to those who want to start their venture.
- Kishor Loan Details – Under the scheme, the person is entitled to get a maximum of 5 lakhs. This loan will be given to the people who have already started their venture. They are applying for the loan to expand the business. Any amount ranging from 50, 000 to 5 lakhs will be granted under the loan scheme.
- 3. Tarun Loan Details – This loan will be given to those who own a medium sized business establishment. This is the maximum amount that will be granted to anyone. Under the scheme, the person will be required to meet some benchmarks. Once this is done, they can apply for a loan up to a maximum of 10 lakhs.
Mudra Loan SBI Form
According to the loans available from the SBI, the business owners can apply for the Shishu Loan, the Kishor Loan and the Tarun Loan. To get these loans, the willing candidate will have to fulfil certain criteria. Once they meet the requirements, they will have to fill the appropriate forms. The loan application forms for the differ loans is almost the same with only a certain variations. These forms can be downloaded from the official website of the bank or can be collected from any branch.
How to fill the form for acquiring the loans
Most of the process of applying for the loan, be it under the Shishu, Tarun or the Kishor scheme. The following steps will assist the interested candidate in applying for the loan:
- The first thing that the person needs to do is collect the loan application form. The application form can be downloaded from the any branch of SBI. If one does not want to stand in line and collect the form, then they can download the paper and get a print out.
- The next task will include filling the application form. When you take a look at the forms, you will see that the name of the type of loan is mentioned on the top of the form. The form for Shishu form is separate but the application form for loan under the Kishor and Tarun credit schemes is the same.
- The person will have to fill in the form with the name of the bank and the branch from where they want to get the credit. The space is provided at the top of the form. It will assist the bank authority in keeping a track of the loans being sanctioned.
- The person will have to fill in the proper tabs with the name of the person, applying for the loan. In the Shishu form, the person will have to fill in the name of the father or the husband, if the applicant is female.
- After the personal details, the person will have to fill in the form with the contact details. The candidate will have to provide the current address and the active mobile number.
- Once the details related to the name and identification is filled, the person will have to fill in the details related to the business, like the name, address, information on the type of ownership.
- Apart from the business establishment details, the candidate will have to fill in the cost of setting up the business and also the estimated amount that is needed to bring about development.
- In both the forms, the candidate will have to furnish the details of the sales made by the company. Along with the current sales, they will also have to give an estimated amount of the sales they can make in the years to come.
- The interested candidate will have to provide relevant papers to support all the claims made in the loan application forms. It will help the bank authority is making the final call.
- All those who fall in the OBC, SC and ST categories will have to attach the certificates. Apart from these details, the columns on religion and nationality must also be filled in. Along with the other documents, the candidates must provide the Aadhar details.
- If the candidates have already applied for loan earlier, the person must mention the loan type, credit amount and the loan account from where the credit has been generated. These details are required in all the loan application forms.
- Last but not the least; the person will have to provide all the documents for verifications. The list of required documents is given at the end of the loan application forms. The candidate needs to attach two photographs with the form.
Documents required for the loan
The following segment will provide you with a clear idea about the various documents and official papers, which are required for getting the loan sanctioned. The list of documents required for the Shishu and the Tarun or Kishor loan are as follows:
Documents for Shishu, Tarun and Kishore Loan
- The first thing that the candidate needs to produce the identity proof. This can be done by producing the passport, voter card, Aadhar card, driving license or any such card that has the name and the photo of the person.
- After this, the person will have to present the valid papers to prove the address. This can be done by submitting the water, tax, telephone or electricity bills. The Aadhar or PAN card can also be presented as they contain the address of the person.
- The candidate will also have to produce two copies of photographs. These photographs must not be more than 6 months old. The photographs will have to be attached to the main application form.
- If the person has any account, then the account statement of at least six months must be submitted. This will assist the bank authority in assessing the economic stability of the business. The person will also have to produce the unaudited balance sheet and tax return files. This is needed when the sum of the loan exceeds 2 lakhs.
- To give the bank authority a proper knowledge about the ways in which the business owner intends to utilize the funds, the bank demands the person to submit an estimate of all the machinery, which must be bought.
- The candidate needs to submit all the necessary papers for validating the business related claims. This means that the candidate will have to submit all the papers that validate the name and the address of the business establishment.
- If the person falls under the category of SC, ST and OBC then the associated documents must be presented to support the claims. If the person is unable to provide these documents, the bank authority has the power to cancel the application.
- The person will also have to provide the bank authority with an estimated balance sheet that the business is expected to make if they get the loan. This will assist the bank in making the decision of who must be given the loan.
- The interested candidate will have to submit all details of the owners of the company. The documents associated with partnership deeds and holdings must be produced while making the application. With these, the candidate/candidates must attach two recent photographs.
Tenure of the loan
The loan will be provided to the interested candidate for a period of 5 years. During the time, the person will have to pay the installments in the bank. As the rate of interest is low, the creditor will not find it difficult to pay the installment amounts. Thus, they will be able to proceed on the path of development, without worrying about the finances.
rocessing fee in SBI Mudra loan
As this is a step taken by the government for empowering the small and the medium business sections, the loan will be given at low interest rates. Any loan that is not more than 50,000, the bank will not charge any processing fee from the person. For a loan that amounts to anything between 50,001 to 10 lakhs, the bank will charge a processing fee of 0.50% of the total amount borrowed.
Under the scheme, the person will not have to keep anything as a collateral safekeeping. All these things have made the scheme very popular among the business owners who fall in the small to medium sectors.
SBI Loan Vs MUDRA Loan
SBI has many loan scheme for helping the individuals and business organizations. Most of the business establishments opt for the loans. Apart from the loan schemes for the big business houses, the bank also provides loans to medium or small business houses. But there are many differences between these loans and the credits offered under the Mudra scheme.
Rate of interests
The rate of the interest on the normal business loans depend on many factors. To start with, the bank will charge low rates if the business is operational for a long tenure. If the amount of loan taken is less, then the rate of interest charged is also less. If the EMI per month is significantly big then the rate will be less.
But this is not the case for the credits taken under the Mudra scheme. Here, the rate of interest will remain the same no matter what amount the candidate is applying for. The rate of interest is not subjected to any change depending on the EMI, time duration and so on.
The EMI structure of the normal business loans, meted out to the business owners is dependent mainly on the amount of credit and the repayment term. If the time of repaying the credit is significantly long then the EMI will be less. But the EMI structure of the Mudra scheme will not vary to much as the time of repayment is fixed.
For the normal business loans, the term for repaying the credit amount depends on the EMI and the loan amount. If the EMI is less, then the candidate will have to opt for long term repayment tenure. For the loans taken under the Mudra scheme, the term for repayment of the credit is fixed. The candidate will have to pay up the entire credit and be free from the burdens of credits within a period of 5 years only.
The Mudra Loan Card
With the help of this card, the creditor will be able to withdraw the money from the ATMs or buy the necessary things for the shops by swiping the card. All these things have made it possible for the business owners to develop the trade and flourish in life.