PMMY: This youth-centric scheme provides loan up to Rs 10 lakh to set up business; know details

What is PMMY?

Youth is the major force of any country. If it is trained, educated and skilled, it can take the country to the path of progress.

It has the energy that can change the fate of a nation in a few years.

Every political establishment understands the power of youth as it is important in nation building.

The Indian government is no exception.

So, it has come up with many schemes that are aimed it aiding youth to make them self-reliant. Pradhan Mantri Mudra Yojana (PMMY) is one such scheme. 

PMMY: The purpose of scheme

The scheme started in 2015 by the government focuses on enchancing enterpreneural skills of youth.

It has been started to help youth who are unemployed and want to start their own business.

It also helps small businessmen who want to expand their business but do not have the fund for it.

In PMMY, loans are given for non-corporate and non-agricultural purposes. The government grants a loan up to Rs 10 lakh under this scheme.

PMMY: Collateral-free loan

Usually, when you take a home loan, gold loan or auto loan, etc., you have to mortgage any of your property with the bank as security, but the PM Mudra Loan Scheme is collateral free.

That is, through this scheme, you get a loan in which you don't keep anything as security.

Loan available in 3 categories

If you want to take a loan through PMMY, you can apply for loan in any government/private banks like a regional rural bank, small finance bank, non-financial company.

The limit of the loan amount has been made according to the category-

Shishu Loan- In this type of loan, financial assistance up to Rs 50,000 is given.
Kishore Loan- Under this scheme, loan up to Rs 5 lakh is given.
Tarun Loan- In this, an amount up to Rs 10 lakh is given as loan.

PMMY: What is eligibility?

Any person who wants to start their own business can apply for a loan under this scheme.

At the same time, if you want to take your existing business forward, you can also apply for it.

But for this, there are some important conditions which need to be fulfilled-

• The person applying for the loan must be a citizen of India.
• The person applying should not have any bank default history.
• Any business for which Mudra loan is to be taken should not be a corporate institution.
• The person applying for loan must have a bank account.
• The age of the person applying for loan should be more than 18 years.

PMMY: Benefits of PMMY

Through Pradhan Mantri Mudra Yojana, you can take a loan ranging from Rs 50,000 to Rs 10 lakh as per your need.

The loan is collateral free and there is no processing fee on it.

The total repayment period of the loan available under this scheme ranges from 12 months to 5 years.

But if you are not able to repay it in 5 years, your tenure can be extended by 5 more years.

You do not have to pay interest on the entire amount of the loan sanctioned.

Interest is charged only on the amount which you have withdrawn and spent through Mudra Card.

Even if you are doing any business in partnership, you can take loan through Mudra Yojana.

In this, you get loan in three categories. Interest rates vary according to category.

PMMY: How to apply for PMMY Loan

• Go to the official website of Mudra Yojana- mudra.org.in.
• The home page will open showing three types of loans- Shishu, Kishore and Tarun. Choose the category you want to apply in.
• A new page will open, download the application form and take a print out of it.
• Fill the application form correctly. Along with the form, you have to attach photocopies of some documents such as Aadhar card, PAN card, proof of permanent and business address, copies of of income tax return and self tax return, passport size photo, etc.
• Submit this application form in your nearest bank. The bank will verify your application and the loan will be given within 1 month.
• To apply online, you will have to create a user name and password. With its help, you will be able to login to the Mudra Loan website.