The central government, led by Narendra Modi, is offering financial support to citizens who plan to start their own business or develop an existing one. This state aid is available for launching new enterprises as well as for expanding already operating commercial structures.
This program is called PM Mudra Yojna, and its key feature is that it is a loan without any collateral, as it is an unsecured loan.
Under the PM Mudra Yojna program, the central government provides an interest-free loan of up to 20 lakhs. Previously, this amount was 10 lakhs, but the government has doubled it to provide more significant economic assistance to beneficiaries, given the positive response to this government scheme.
Under the PMMY program, loans are issued to entrepreneurs in four different categories, allowing them to gradually grow their business.
PM Mudra Yojna provides four categories for loan disbursement. The first is the Shishu category, which provides an amount of 50 thousand rupees. Next is the Kishor category, where the loan approval ranges from 50,000 to 5 lakhs. The Tarun category provides an amount from 5 lakhs to 10 lakhs, and the Tarun Plus category covers amounts from 10 to 20 lakhs.
No educational requirements are set, and a person with only an eighth-grade education can apply for government financial assistance. Any citizen of India can take advantage of this benefit. Initially, PM Mudra Yojana was introduced in 2015 for those wishing to establish their own business.
To receive a loan under the PM Mudra scheme, it is crucial to have a well-developed business plan. A Mudra loan application can be submitted through a bank. After submitting the application, the respective bank evaluates it by analyzing income, field of activity, credit history, documents, and the borrower's ability to repay the debt before granting approval and disbursing the loan amount. The interest rate on the loan is determined by the bank and the applicant's profile.
When applying under the PMMY scheme, necessary documents include the applicant's Aadhaar card, PAN card, proof of residence, passport-sized photograph, business plan, KYC documents, and income proof. Applications can be submitted online at https://www.mudra.org.in/, or by visiting banks.