State Bank of India (SBI) has introduced numerous Indian government programs to provide financial assistance to deserving borrowers. MSME loan division has various schemes aimed at established as well as budding business aspirants. PMMY or Pradhan Mantri Mudra Yojana, also called SBI Mudra loan, is one such program operated by SBI.
PMMY is the scheme introduced by our Prime Minister in 2015 to offer credit options to non-farm, non-corporate MSME units with loans of as high as Rs 10 lakh. Pradhan Mantri Mudra Yojana is nothing but a zero collateral loan that may be utilized by individuals who require funds for business purposes, expansion reasons, establishment modernization, business set up etc. This form of credit can be used for setting up a new business unit to enhance or boost development in existing enterprises. E Mudra loan refers to micro units’ development and refinances agency limited. This is a financial scheme set up by the Indian Government for refinancing and development of micro-unit enterprises. E Mudra has enrolled 17 private banks, 27 public banks, 25 microfinance institutes and 27 regional rural banks as partner institutes to channel massive support to deserving borrowers on the grounds of eligibility parameters.
SBI, or State Bank of India, provides several SME loans involving PMMY (Pradhan Mantri Mudra Yojana).
SBI e Mudra Loan – Snapshot
|Credit Nature||Provided as working capital or term loan|
|Reason or purpose for offering loan||Capital for enterprises or startups, expansion of units, modernization of prevailing units and purchase of machinery and equipment.|
|Who are the eligible borrowers?||Those entrepreneurs or business owners are looking to begin a new business, profit-making businesses or those businesses looking to expand further.|
|Loan quantum||Highest loan proceeds = Rs 10 lakh
Tarun category – Loan between 5 lakh and 10 lakhs
Kishore category – Loan between 50,000 and Rs 5 lakh
Shishu category – Loan up to Rs 50,000
|Loan repayment tenure||3 to 5 years|
|Processing charges||For Kishore and Shishu loan – Nil
For the Tarun loan – 0.50 percent of the loan proceed
|Margin||Loan up to Rs 50,000 – Nil
Loan amount between Rs 50,000 and Rs 10 lakh – 10 percent
|Rate of interest||MCLR linked rates|
|Security or collateral requirement||Zero collateral is required. But as primary collateral, hypothecation of the P & M for term credit options and in-depth hypothecation of receivables for cash credit and stocks must be done.|
SBI e Mudra features –
E Mudra loans are of 3 types. You can apply in the apt category according to your requirements.
Shishu Loan – Amount as high as Rs 50,000 can be availed with an interest rate being at least 1 percent per month, and the repayment tenure allowed ranges anywhere between 1 and 5 years.
Kishore loan – The loan amount allowed is anywhere between Rs 50,000 and Rs 5 lakh. The rate of interest depends on the bank lender. The lender decides your interest rate for the Kishore loan based on your credit history and other important parameters. The loan repayment duration is based on per bank’s discretion and does not surpass 5 years.
Tarun loan – The loan amount allowed ranges anywhere between Rs 5 lakh and Rs 10 lakh. The rate of interest is based on the lender, keeping in view your credit history. The repayment tenure is based on the discretion of the bank, but it must not surpass 5 years.
The loan amount that you can get as per the SBI Mudra scheme fell under the CGFMU (credit guarantee for micro-units) and offered by the NCGTC (national credit guarantee trustee company) and hence doesn’t require any security or collateral. The maximum tenure for a loan generally is five years, including a moratorium of as high as six months based on the income generation capacity and activity of the unit. A yearly assessment may be performed.
Cash credit holders are issued a Rupay card for quick fund accessibility. Funding needs depend upon the development and growth stage of the micro-unit and the entrepreneur’s merit. The interest rates for such loans are decided by the lender based on your credit profile.
What are the eligibility criteria for an SBI e mudra loan?
E Mudra loans can be taken up by business owners, entrepreneurs looking to begin their new startup or business or who already hold an established entity and require funds for business expansion. A loan may be applied by individuals engaged in the NCSB (non-corporate small business segment) from both urban and rural regions. This specific segment consists of numerous partnerships or proprietorship firms running service sector units, small manufacturing units, shopkeepers, truck operators, vegetable and fruit vendors, machine operators, artisans, machine operators, food processors, small industrialists, and others.
Startup applicants must show a proper business model reflecting the profit-making potential of the business to avail loan. Startups are generally categorized under the Shishu scheme and may avail of a loan amount as high as Rs 50,000. Established business enterprises already are into profit-making zones and may apply for Tarun or Kishor loans for credit requirements to either expand their business, upgrade machinery or equipment and others. Such applicants must hold profit proofs and must substantiate the requirement for equipment and machinery up-gradation. They must explain how such upgradation and expansion in their enterprise can assist in gaining more profits or creating more employment for the needy.
How can you apply for an SBI Mudra loan?
Existing SBI customers having a long-term relationship in the form of a current or savings account can place an application for an SBI Mudra loan for a loan amount of as high as Rs 50,000 through the online medium. Ensure that you must fall between the age of 18 and 60 years to be eligible for the SBI Mudra loan. For an amount higher than Rs 50,000, the SBI branch must be visited physically.
What are the crucial documents for the SBI Mudra loan?
. Identity proof – Driving license, voter’s ID card, Aadhaar card, PAN card, or Aadhaar card.
∙ Residential proof – Current electricity or telephone bill, voter ID card, property tax receipt, passport, Aadhaar card, a certificate issued by the Indian government authority etc.
∙ Bank statement – Past six months’ statements
∙ 2 passport size photos
∙ Caste certificate, if any
∙ Business proof and income tax documents