Durgesh is working as a driver in a cab provider company. One day, a passenger advised him that he can own a car by availing financial assistance under Pradhan Mantri Mudra Yojna (PMMY). He seeks your advice regarding th

Mudra loan is extended for a variety of purposes which result in 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-for commercial use only; Loans for agri-allied non-farm income generating activities, e.g. pisciculture, bee keeping, poultry farming etc; Tractors, tillers as well as two wheelers used for commercial purposes only. Once the beneficiary identifies an idea and comes up with a business plan, he is supposed to select the business category under which he wishes to avail the loan (Shishu, Kishor or Tarun). Durgesh can contact the nearest public/ private sector bank where he can apply for business loan under Pradhan Mantri Mudra Yojna (PMMY). The list of institutions partnering in the MUDRA initiative is available on the MUDRA portal. An application form under this scheme will be available with each of the above listed institutions. This application form has to be submitted along with the following documents for the approval of the loan: Proof of Identity (Self attested Voter ID/Driving License/PAN Card/ Aadhaar Card/Passport/any other Photo ID issued by Government) Proof of Residence (Recent Telephone Bill/Electricity Bill/Property Tax Receipt (not older than 2 months)/ Voter ID Card/Aadhaar Card/Passport/Domicile Certificate/ Certificate Issued by a local authority) Applicant's recent photograph (not older than 6 months) Quotation of Machinery/other items to be purchased Name of the Supplier/Details of Machinery/Price of Machinery Proof of Identity/Address of the Business Enterprise (relevant licenses & certificates) Proof of Category (SC/ST/OBC/Minority etc.) Apart from the above-mentioned documents, individual banks could ask for other documents as needed. The Banks are not supposed to take any processing fee and are not supposed to ask for any collateral. The repayment period is also extended to 5 years. But it is also made clear that the applicant should not be a defaulter to any Bank or financial institution. MUDRA Bank is not a separate bank (like SBI etc). It is a government financing scheme to provide business loan to new small businesses in India. MUDRA will be operating as a refinancing institution through State / Regional level intermediaries. MUDRA's delivery channel is conceived to be through the route of refinance primarily to NBFCs / Micro Finance Institutions (MFIs), besides other intermediaries including Banks, Primary Lending Institutions etc. The rate of interest will be fixed by the institutions time to time based on guidelines from the RBI.