Pradhan Mantri Mudra Yojana Eligibility Criteria And Other Information

Pradhan Mantri Mudra Yojana: Pradhan Mantri Mudra Yojana (PMMY) provides loan facility up to 10 lakhs for non-corporate, non-agricultural, small/micro enterprises. The full name of Mudra Bank is Micro Units Development and Refinance Agency (Mudra) which was launched with the aim of promoting the youth of India and the functioning of small enterprises. Which has been started under Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana Micro Units Development and Refinance Agency Ltd. [MUDRA] is an NBFC supporting development of micro enterprise sector in the country. MUDRA provides refinance support to Banks / MFIs for lending to micro units having loan requirement upto 10 lakh. MUDRA provides refinance to micro business under the Scheme of Pradhan Mantri MUDRA Yojana.

Other products are for development support to the sector. A bouquet of mudra offerings is shown below. Offerings are being targeted across a spectrum of beneficiary segments. Pradhan Mantri Mudra Yojana

At present, only sectors such as land, transport, community, social and personal services, food production, textiles are included under this scheme, going forward many other new sectors will be included in this, due to which there are very bright opportunities for new industries. Small traders, entrepreneurs will scale the heights of success by taking advantage of this scheme.

In the year 2015-16, 3.32 crore poor people have benefited through Mudra Yojana. We are going to double the budget for this scheme in the current year. Most of the beneficiaries of the Mudra scheme are women, Dalits and people from minority communities

Pradhan Mantri Mudra Yojana | Why the need for Pradhan Mantri Mudra Yojana?

The formal banking system is beyond the reach of people in rural and remote areas of India. Because of this, when such people have to start a small business, they borrow money from local moneylenders at interest and then get caught in the vicious cycle of interest and cannot improve their business, but on the contrary they themselves also fall into the cycle of poverty. On the other hand, our youth have many ambitions and skills. But due to lack of money, they hesitate to start any such industries with their skills. Saru Mudra Bank was persuaded to provide an effective solution to this situation, so that the small units do not stop moving due to lack of finance.

Pradhan Mantri Mudra Yojana | Form of Pradhan Mantri Mudra Yojana

The scheme is divided into three main aspects:

An infant in which a loan of 50 thousand can be obtained.
Kishore in which you can get a loan ranging from 50 thousand to 5 lakh rupees.
Youth in which loans can be availed from 5 lakhs to 10 lakhs. Any Indian citizen who is involved in manufacturing, processing, business, service etc.
Those involved in various sectors can get loans under the three aspects described above.

Eligibility Criteria: Pradhan Mantri Mudra Yojana

ELIGIBILITY CRITERIA FOR PARTNER INSTITUTIONS

• Micro Units Development and Refinance Agency (MUDRA) has adopted the eligibility norms in respect of various category of Banks for the partner lending institutions for the purpose of availing refinance to micro units in manufacturing, trading and service sector in rural and urban areas.

I. SCHEDULED COMMERCIAL BANKS

A. Public Sector Banks

•  Should have earned profit during the last 2 years failing which minimum external rating of long term instruments not below A-(minus) from accredited credit rating agencies.
•  Level of Net NPAs not exceeding 15%.
•  CRAR as stipulated by RBI from time to time.
•  Net worth above Rs.250 crore.

B. Private Sector Banks

•  Should have earned profit during the last 2 years failing which minimum external rating of long term instruments not below A-(minus) from accredited credit rating agencies.
•  Level of Net NPAs not exceeding 10%.
•  CRAR as stipulated by RBI from time to time.
•  Net worth above Rs.250 crore.

C. Regional Rural Banks

•  Should have earned net profit for preceding two years.
•  Level of Net NPAs equal to or less than 6%.
•  CRAR as stipulated by RBI from time to time.
•  Net Owned Fund above Rs.50 crore.

D. Small Finance Banks

•  Should have been granted final license by Reserve Bank of India (RBI) for carrying on Small Finance Bank business and have commenced operations of the Small Finance Bank.
•  SFB/previous entity prior to conversion into SFB (taken together) should have earned profits during last 2 financial years.
•  Should have sizeable outstanding portfolio (> `500 crore) comprising advances to micro/small enterprises in respect of income generation in manufacturing, services, trading or activities allied to agriculture /other activities approved/to be approved under PMMY loans from time to time.
•  Should have strong fundamentals based on last audited balance sheet .
•  CRAR as stipulated by RBI from time to time.
•  Net worth greater than or equal to 100 crore.
•  Gross NPA less than or equal to 5%.

II. MICRO FINANCE INSTITUTIONS

•  Should be a registered legal entity lending to micro units meeting the loan size criteria of MUDRA (which is presently loan size of Rs.1 lakh or as stipulated by RBI from time to time) for atleast 3 years or the promoters /management should have an experience of atleast 10 years.

•  Having a minimum outreach of 3000 existing borrowers.
•  Should have received minimum capacity assessment rating as indicated below :

• Mfr-4 (equivalent to CRISIL) for TN, Kerala, Karnataka andPuducherry
• Mfr-4 (equivalent to CRISIL) for Tier-I and Tier-II MFIs and Mfr-5 for the Tier-III
• MFIs in other remaining states.
•  Should have suitable systems, processes and procedures such as internal accounting, risk management, internal audit, MIS, cash management etc.
•  Should target own account enterprises within micro units category i.e. business run by the owner.
•  Meeting the minimum CRAR and other norms stipulated by RBI for MFIs registered as NBFC-MFIs and comply all the prevailing RBI guidelines, including pricing etc.
•  Three years profitable track record, Recovery performance not less than 90%, Portfolio at Risk > 90 days below 5% (relaxable upto 7% on case to case basis) for MFIs.

•  Should be a member of credit bureaus as per RBI policy.
•  Has a minimum term loan/refinance requirement of Rs.0.50 crore.
•  Targets the poor, especially women and is secular.
•  Has audited financial statements (in case of NGO with microfinance as a programme, the NGO should have separate audited financial statements for the MFI programme) and
•  For NBFCs or any other MFI set up for/by taking over the existing MF operations of another entity, track record of the earlier entity can be considered for existence, past ratings etc., guidelines relating to value of FDRs to be placed as security etc. subject to continuity of promoters/senior management/transfer of major (> 60%) part of the MF operations of the earlier entity.
•  MUDRA’s loan to be on lent by MFIs for use by borrowers in; setting up/running nonfarm income generating activities and micro/small enterprises including trading activities/services.

III. NON BANKING FINANCE COMPANIES (NBFCs) Pradhan Mantri Mudra Yojana

A. Larger NBFCs i.e. Assets size > Rs.500 crore

•  The NBFC should be registered with RBI as Asset Finance Company (AFC) or Loan Company. In respect of NBFC-Loan Company, a CA certificate that if the loan is given for income generating activities, 60% of the income comes from productive assets should be furnished. Two Tier NBFCs extending loan / resource support to MFIs (both NBFC-MFIs and non-NBFC MFIs complying with RBI norms for NBFCMFIs or priority sector status) for on lending to ultimate borrowers would also be considered
•  NBFC should have been in business for 5 years and should have earned Net Profit for last 3 years. In case of the NBFCs financing second hand vehicles, the NBFC needs to have experience of 3 years in the activity and also have recorded profit during the period.
•  Minimum Net Owned Fund of Rs.20 crore and Minimum Asset size of Rs.500 crore.
•  CRAR-Minimum 15%.
•  Minimum Gross NPA & Net NPA would be based on rating of agency.
•  External rating range of BBB+ and above.

B. SMALLER NBFCs i.e. Asset size less than Rs.500 crore Pradhan Mantri Mudra Yojana

•  The NBFC should be registered with RBI as Asset Finance Company (AFC) or Loan Company. In respect of NBFC-Loan Company, a CA certificate that if the loan is given for income generating activities, 60% of the income comes from productive assets should be furnished. Two Tier NBFCs extending loan / resource support to MFIs (both NBFC-MFIs and non-NBFC MFIs complying with RBI norms for NBFC-MFIs or priority sector status) for on lending to ultimate borrowers would also be considered
•  Should have been in business for 5 years and earned Net profit for last 3 years. In case of the NBFCs financing second hand vehicles, the NBFC needs to have experience of 3 years in the activity and also have recorded profit during the period. Preference may be given to NBFCs enjoying well conducted credit facilities from Scheduled Commercial Banks.
•  Minimum Net Owned Fund of Rs.15 crore and Minimum Asset size of Rs.25 crore.
•  The NBFC normally has done lending business of at least Rs.20 crore during the immediately preceding financial year.
•  CRAR-Minimum 15%.
•  Minimum Gross NPA & Net NPA would be based on rating of agency.
•  External rating range of BB- and above.

Fiscal Incentives: Pradhan Mantri Mudra Yojana

To signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to, MUDRA offers incentives through these interventions:

•  Shishu : covering loans upto  50,000/-
•  Kishor : covering loans above  50,000/- and upto  5 lakh
•  Tarun : covering loans above  5 lakh and upto  10 lakh

Generally, loans upto  10 lakh issued by banks under Micro Small Enterprises is given without collaterals. Pradhan Mantri Mudra Yojana

Objective Of The Scheme: Pradhan Mantri Mudra Yojana

Mudra loan is extended for a variety of purposes which provide income generation and employment creation. The loans are extended mainly for :

• Business loan for Vendors, Traders, Shopkeepers and other Service Sector activities
• Working capital loan through MUDRA Cards
• Equipment Finance for Micro Units
• Transport Vehicle loans

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Important Links: Pradhan Mantri Mudra Yojana

• Read In Gujarati
• For More Information Click Here

Mudra Loan Form Kit [PDF] Pradhan Mantri Mudra Yojana

• Common Loan Application Form For Kishor And Tarun  [PDF File]
• Application Form For Shishu [JPG File]
• Check List For Shishu Application[JPG File]

Banker’s Kit:  Pradhan Mantri Mudra Yojana

• Application form for Claiming Refinance [Docx File] Pradhan Mantri Mudra Yojana
• Data Submission for Claiming Refinance [Docx File] Pradhan Mantri Mudra Yojana