business plan sample for mudra loan

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• How do apply for a mudra loan?
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Project report for Mudra Loan

Page Contents

• 1 How to make Project Report For Mudra Loan?
• 2 What is Project Report for mudra loan?
• 3 How much loan require & Why?
• 4 What is Mudra loan project report?
• 5 Project report is mandatory for mudra loan?
• 6 What is the cost of Project report?

How to make Project Report For Mudra Loan?

If you are planning to start a business and require mudra loan from Mudra Bank, you need a perfect project report. We will help you to prepare your documents before applying for Mudra loan. Mudra loan is a collateral-free loan and the bank wants to ensure that the applicant can repay the loan or not.

Few banks are providing online emudra loans via its own website instantly like State bank of India etc. SBI has launched a emudra website for Mudra loan. Via that website, you can easily apply for mudra bank loan. It is really easy and prompt but you will get here only SHISHU loan which is up to 50,000.

For another kind of Mudra bank loan you have to prepare lots of documents like KYC, Project report, Quotation, GST Number, Registration number, etc.

KYC is Know Your Customer policy and bank always demand your KYC before starting the process. In KYC you require your PAN Card, Aadhaar Card, Voter I Card etc.

What is Project Report for mudra loan ?

The major part of Mudra loan or other business loan is “Project Report”. A Project report will help to understand the nature of your business, process, procurement, job opportunities, profitability & ROI. It will clear that how much you are prepared or sincere for your startups.

The project report should be clear, meaningful and understandable because it will represent you in your absence. Its report should be in detail with facts and statics with growth. Incomplete project reports or mysterious data may be a cause of rejection and rejection will reduce your CIBIL score.

A project report for Mudra loan contains lots of things like your personal, educational and professional details. Bank may ask about the experience of that field and several other questions related to field, experience to check eligibility.

How much loan require & Why?

Bank will check your investment part deeply and ask why you require that much amount? How are you calculate it? That time if you have a project report, you can tell them the entire investment part & cost of machinery or resource. Your preparation will help you to become the most eligible candidate and the bank will clear your application for mudra loan.

During the application of a mudra bank loan, you should check your documents properly & deeply, you’re all personal, educational, address details should be match word by word because bank’s executives will check all details deeply and if they will get any issue in documents, they will hold your application and ask for updated documents.

The final and crucial part of the project report is costing & quotation because when you will prepare the project report you should have the cost of required machinery & other resources. You should have three quotations of each machinery & other resources (Amount may differ of each quotation) to make it more professional and authentic. I suggest you submit a genuine quotation of each vendor with a GST number because the bank may visit the vendor location to check authenticity.

We suggest you submit authentic and genuine documents for a mudra bank loan because if the bank will find any discrepancy in your documents they may reject your application & it will hit your CIBIL score and you know that all banks always check cibil score to disburse any kind of loan.

If you are confused and need professionals for your project report. You can contact us we will help you. You can contact us at mudrakibaat (at) gmail.com. We will provide you a professional report at nominal charges. Our team will talk to you get all the information to prepare mudra loan project report on your behalf.

What is Mudra loan project report?

Project report is mandatory for mudra loan, what is the cost of project report, related posts, canara bank mudra loan.

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Project Report for Mudra Loan

Whether you want to start a new business or a project or you want to expand your existing business, finance is the blood of any business.  When you have a great idea, but no money to execute it, you can look for loans from banks and financial institutions.

There are many requirements to get a loan from a bank and these requirements vary from bank to bank and according to the amount and type of loan you are looking for. In this article, we are going to discuss how the project report can be prepared for loan.

Mudra loans, like any other commercial loan, require the submission of a project report for lending under the Tarun or Kishore category. Loans under the Shishu scheme are the most readily available loans for small businesses and borrowers are generally not required to present project reports with applications.

 A project report is a document that describes the business. It provides a detailed cost-benefit analysis of the proposed expenditure for which a business loan is sought. It provides the audience of the report with a detailed idea of ​​the project cost, scale of activities (proposed and existing), existing debt (if any), revenue estimates, and more.

The project report should be complete and with valid data so that it can be easily accepted and approved for approval of loans under PMMY.

Our experts can prepare an excellent project report for Mudra loan, click here for more details and message us on what’s no. 9993234091.

How to create a Mudra Loan Project Report?

Table of Contents

• 1 How to create a Mudra Loan Project Report?
• 2 Why do I need a project report for a Mudra loan?  What is the role of the project report in Mudra loan approval?
• 3 What are the benefits of the project report for the Mudra loan? 
• 4 Can the project report prepared by https://projectreportbank.com/ be used for the MUDRA loan?
• 5 Which business projects are covered under the Mudra loan?
• 6 Frequently Asked Questions on Mudra Loan Project Report
• 7 Is it easy to get the Mudra Loan Project Report Download?
• 8 Can I get the Mudra Loan Project Report sample pdf?
• 9 Where can I get the Mudra Loan Project Report format in the doc?
• 10 How to get the loan form of Mudra Loan?
• 11 Where can I get the Mudra Loan form?
• 12 Is a guarantor needed for the Mudra Loan?
• 13 Can I get a Mudra Loan if I am not in India?
• 14 Can I get a Mudra Loan for a small-scale Business?
• 15 Do I need to pay any processing fees for the Mudra loan?
• 16 I am 18 years old, Can I apply for Mudra Loan?
• 17 Can I open a grocery store from Mudra Loan?
• 18 Is there any format for the Mudra Loan Project Report?
• 19 From where can I avail Mudra Loan?
• 20 Who can avail of a Mudra Loan?
• 21 What is the interest rate for Mudra Loan?
• 22 Is the rate of interest for Mudra Loan low?
• 23 How do I write a project report to avail loan?
• 24 How can I write a business project report?
• 25 How to create a project report on MSME Loan?
• 26 What are the components of the Mudra Loan Project report?
• 27 What is the Mudra Loan Project Report Model?

A project report for a bank loan is a document that gives details about a business or project for which finance is being sought. It contains details about the economic, financial, managerial, technical aspects or business of the project.

a.  Business / Project Summary: It talks about what the business or project is, about the need for finance, etc.

b. Business Prospects and Prospects: Explain the scope of the project, the current situation and prospects.  It is about the financial and technical feasibility of the project.

c.  Details about promoters and other important officers: Profile, educational qualification, details of promoters and key personnel experience.

d. Required Resources: Machinery, Infra, knowhow etc.: Explain the cost and capacity as well as the infrastructure and technical requirements of the project.

e.  Details about targets and prospective customers: Explain the project’s consumer profile about the possibilities of scaling and targeting customers.

f. Investment Requirement: Specify details about the required investment along with specifications. This is essentially the cost of the project.

g. Sources of Finance: How essential funds are being sourced. Details about ownership and external funds.

h. Project financial statement: It includes financial statements such as balance sheet, profit and loss account.

 i. Financial Estimates: Quantitative projection on income, sources of funds, expenditure, and application of funds.

j.  Ratio analysis: Financial statements need to be calculated and analyzed through key ratios and their implications.

k.  Fund Flow Statement: Details about funds from where it is sourced and the application of funds.

l. Brief analysis: analysis of the broken point of the project, this is feasibility in terms of cost and benefit

m. Conclusion: Findings about the project, its weaknesses, strengths, opportunities and threats. 

The above is not an exhaustive list of project reports required by the lenders. Many lenders may have specific requirements related to the project report and may also be sought with the help of a professional in preparing the project report.

The main requirement in this regard is that the project report should be complete and factual otherwise it may lead to rejection of the loan application. This in turn will harm the credit score of the applicant. Therefore, project reports should be made with the utmost care and following the necessary lender guidelines.

Lenders will examine the project report with a fine comb and therefore all the details provided by the applicants can be verified by experts.

Why do I need a project report for a Mudra loan?  What is the role of the project report in Mudra loan approval?

Thus, a project report for bank lending is required to avail funds and loans from financial institutions and banks.

Every businessman is always ready to expand his business for which he needs money. The funding will come from banks NBFCs or private equity funding. Now, to obtain funds from banks as well as other financial institutions, every entrepreneur needs to prepare a detailed business plan which is also known as a bank loan project report for feasibility report or feasibility report.

When an entrepreneur imagines a business idea, he thinks a lot about its feasibility.  However, if he does not write the same and makes a detailed calculation of the costs and benefits involved, he cannot guess whether it is feasible and the idea is eventually dropped. Therefore, it is always appropriate to prepare a detailed business plan or project report to understand whether it is practical or not.

Failure to present a clear-cut project report can result in rejection by the bank and then you will have to reapply or reconsider the information entitled in the report. So, if you have any doubts or any questions regarding the preparation of the project report of the bank loan, then contact us through the Whats app or email.

What are the benefits of the project report for the Mudra loan? 

Mudra loans are mainly for people setting up small businesses and hence the government has ensured that there is not much delay in disbursement of Mudra loans. Once the project report is submitted for the Mudra Bank loan, there is hardly a small phase for approval and disbursement of the loan.

What is the project report for the Mudra loan?

The major part of a Mudra Loan or other business loan is the “Project Report”. A project report will help you understand the nature of your business, procurement, process, job opportunities, profitability and ROI. This will clarify how ready or honest you are for your startup.

The project report should be clear, meaningful and understandable as it will represent you in your absence. Its report should be in detail with facts and figures along with development. Incomplete project reports or mysterious data may cause rejection and rejection will lower your CIBIL score.

A project report for a Mudra loan includes many things like your personal, educational and professional details. The bank can ask about the experience of that field and many other questions related to the field, experience to check eligibility.

Is a project report mandatory for a Mudra loan?

No, there is no requirement for a project report for the Shishu loan but the Tarun and Kishore project report is mandatory to understand the business process.

What if my Mudra Loan project report gets rejected?

If in any way the project report submitted for a bank loan is rejected by the bank, the business firm applying for the loan can prepare the report of any other project and apply the project report to any other bank or financial institution. It is important to note that this may not be the only reason for the rejection of a loan.

Is there a specific format for making a project plan report for the Mudra loan?

No, there is no fixed or bank-approved format for project planning for the Mudra Bank loan. However, some information, such as market size and technical aspects, can be added to the Mudra loan project plan.

Who prepares the project report?

Project reports can be prepared by business entrepreneurs or they can hire the services of our website www.projectreportbank.com for the PMMY Project Report .

Does the bank verify the information given to me in the Mudra Loan application?

Of course! Before issuing a loan to a business, the bank verifies the financial statements and other information presented in the project report. Therefore, it is advised that banks prepare a clean project report for the loan with all the necessary details regarding the financial projects of the business. However, the data provided in the financial projections are based only on a base decision basis and cannot be verified, bankers need to examine the feasibility of the assumptions made.

Need to sign Mudra Project Report for Bank loan/seal by CA?

No, CA is not required to be signed or stamped for submission of the Mudra Loan Project Report in the bank, it is a plan or future data submitted by an entrepreneur to the bank or institution where the loan is applied for.

Can the project report prepared by https://projectreportbank.com/ be used for the MUDRA loan?

Yes, the Project Report for Mudra Loan is prepared by our expert. You can use our Mudra Loan Project Report to apply.

Why is a professionally created project report required?

A project report is a foundation document for analyzing the future performance of an entity and is a very important document for forming an opinion about the future of the company or business entity.

• To avail of working capital loans, term loans and other loans from banks or financial institutions.
• To make a presentation to get the equity participation of the investor.
• To structure/restructure the firm’s bank lending / financial and business strategies.
• For buy, to start or to start a new business.
• To properly dispose of an existing business.
• Also, to assess the value of the project or business.

Which business projects are covered under the Mudra loan?

Mudra loans are extended for various purposes resulting in employment generation and income generation. Loans are mainly extended to:

• Business loans for traders, sellers, shopkeepers and other service sector activities
• Working capital loan through MUDRA card
• Equipment Finance for Micro Units
• Transport Vehicle Loans – For Business Use Only
• Loans for agricultural-related non-agricultural income-generating activities, e.g.   Beekeeping, Fisheries. Poultry, etc.
• Tractors, tillers as well as two-wheelers are used for commercial purposes only.

Following is a list of activities that can be covered under the MUDRA loan:

1) Transport Vehicle

Purchase of transport vehicles for transportation of goods and passengers such as auto-rickshaws, small freight transport vehicles, e-rickshaws, 3-wheelers, taxis, etc.  Tractor trolleys, tractors, and power tillers that are only necessary for industrial purposes are also liable for PMMY assistance. Two-wheelers that are running for industrial purposes are not covered in PMMY.

2) Community, social and personal service activities

Salons, gymnasiums, beauty parlours, boutiques, dry cleaning, sewing shops, bicycle and motorcycle repair shops, DTP and photocopying, medical shops, facilities, courier agents, etc.

3) Food Products Sector

Activities such as pickling, papad making, jam/jelly making, agricultural produce protection at the village level, sweets shops, small serving food stalls and daily catering/canteen services, cold storage, cold chain vehicles, ice making units, biscuits, ice cream units, bread and bun making , etc.

4) Textile Product Area / Activity

Handloom, khadi activity, powerloom, brocade and zardozi work, traditional embroidery and hand work, traditional dyeing and printing, weaving, garment design, computerized embroidery,  cotton weaving, sewing and other textile non-garment products such as vehicles  Accessories, bags, furnishing of goods, etc.

5) Business loans for merchants and shopkeepers

Financial assistance for lending to individuals for their shops/business and business activities/ service enterprises and non-farm income generating activities, which are activities with a size of beneficiary loan up to 10 lakhs per enterprise/borrower.

6) Equipment Finance Scheme for Micro Units

With a beneficiary loan size of up to 10 lakhs, micro-enterprises can be started by purchasing machinery and equipment.

7) Activities allied to agriculture

‘Activities allied to agriculture’, e.g. Beekeeping, Poultry, Fisheries, Livestock farming, Sorting, Grading, Aggregation Agro industries, Agri-clinics, Fisheries, Agribusiness centres, Food and agro-processing, etc. (excluding land improvement, crop loans, such as canals, wells, and irrigation) and supporting services that foster livelihoods or generate income would be covered under the PMMY.

Frequently Asked Questions on Mudra Loan Project Report

Is it easy to get the mudra loan project report download.

If you want to avail the Mudra Loan in agisting of time you need to prepare a project report. If you want to get a Mudra loan then you need to prepare a project report. If you do not know how to prepare it, you can use our services. We will make the project report available to you for download in a very short time.

Can I get the Mudra Loan Project Report sample pdf?

It is not that difficult to get the Mudra Loan Sample PDF. Our website gives you instant access to the project reports of MUDRA loans. You can send us a request on WhatsApp to get a sample project report

Where can I get the Mudra Loan Project Report format in the doc?

If you are looking forward to availing a Mudra loan, you can take the help of our experts in preparing the project report. You can request us on WhatsApp to make the project report available in doc format.

How to get the loan form of Mudra Loan?

You can download it online free of cost or get one from the branches of all the banks.

Where can I get the Mudra Loan form?

The Mudra loan form is available in all the bank branches in India. PM has allowed all the banks to provide you facility of Mudra Loan so you can get the loan form from any Indian bank.

Is a guarantor needed for the Mudra Loan?

No, I do not need a guarantor for Mudra Loan. You don’t even require an upper age limit to acquire this loan.

Can I get a Mudra Loan if I am not in India?

You can still get a Mudra Loan. Contact the nearest branch of the bank and get it done.

Can I get a Mudra Loan for a small-scale Business?

Yes, you can get a mudra loan for a small-scale industry in India but it is usually less than 10 lack rupees.  

Do I need to pay any processing fees for the Mudra loan?

You need not pay any processing fees when you apply for a Mudra loan online.

I am 18 years old, Can I apply for Mudra Loan?

If you are 18 years you can avail Mudra Loan. Anyone below 18 years of age cannot get it. Using this money you can become an entrepreneur.

Can I open a grocery store from Mudra Loan?

With a Mudra loan, you can avail yourself of money of amount 10 lakhs. So you can instantly start a grocery store with a Mudra loan in your village or city.

Is there any format for the Mudra Loan Project Report?

As there is no exact format for the Mudra Loan project report. But you need to include everything related to your planned business plan to avail Mudra Loan. You can thus check out the procedure to avail of Mudra Loan on our website.

From where can I avail Mudra Loan?

Mudra Loans are given by all the eligible financial bodies in India as directed by the Reserve Bank Of India be it a public or a private bank. For example, all the nationalized, cooperative and rural banks can give you Mudra Loan.

Who can avail of a Mudra Loan?

Mudra loans can be availed by all individuals and startup companies on a small scale and medium scale. Business owners, manufacturers, artisans, vegetable and fruit sellers etc can also avail of the Mudra Loan.

What is the interest rate for Mudra Loan?

The interest rate of Mudra Loan is expected to be lower than the interest rate of other loans.

Is the rate of interest for Mudra Loan low?

The rate of interest of Mudra Loan is low in comparison to other types of bank loans.

How do I write a project report to avail loan?

The sequence to write the project report for a loan is below. Business background Client profile The short and long-term objectives Analysis of market Assessment of market Financial and operational plan

How can I write a business project report?

Using the keys to an effective business report below, you can write a business project report. Handover the project report on time. The report is expected to be there on time and delay defeats the purpose of the report. Providing complete but incorrect information is bad and the loan may not approve. You must not try to cover up the negative news as the details should be made transparent. Stay proud of your team and its achievements.

How to create a project report on MSME Loan?

The first step is to describe the objective and then think about the purpose of the project report. Next, you must try to understand the target audience and create a formal project report for the stakeholders. Format the report carefully. Present the data and facts effectively. The report structure should be effective. The project report should be easily readable.

What are the components of the Mudra Loan Project report?

Following are the components of the project report Mudra Loan. Objective Area of Expertise Budget Details of tools Commercial details Profile of Company Order details Employee information Logistics Advertising Marketing

What is the Mudra Loan Project Report Model?

MUDRA is financial help that is given by banks to support and protect small-scale businesses and encourage entrepreneurs in the country, To avail Mudra loan, you need to create a project report that provides all the details about your business. It is called the Mudra loan project report model. This helps you to get finance from banks very quickly and you can easily start your new startup in India. The most important information relating to your business like company background, profit, number of employees, return of interest etc should be included in the project report for Mudra Loan. Hiding facts and providing false information or misrepresenting data can lead to reducing your credit score. It is thus advised to include personal and professional details that are genuine to get attractive Mudra Loans.  

Official Website of Loan Scheme:- https://www.mudra.org.in/

Also, Read our article on:-

• Bank of India Mudra Loan Scheme
• Mudra Loan Scheme Purpose, Features, and Offerings
• Bank of Baroda Mudra Loan Scheme

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• Frequently Asked Questions

Sources And References

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• Public Sector Banks
• Private Sector Banks
• State operated cooperative banks
• Rural banks from regional sector
• Micro Finance Institution (MFI)
• Non-Banking Finance Company (NBFC)
• Small Finance Banks (SFBs)
• Other financial intermediary approved by Mudra Ltd. as member financial institutions

Interest rate

Upfront fee/processing charges.

• Shishu: Covering loans upto Rs.50,000/-.
• Kishore: Covering loans above Rs.50,000/- and upto Rs. 5 lakhs.
• Tarun: Covering loans above Rs. 5 lakhs and upto Rs. 10 lakhs.

Eligible borrowers

• Individuals
• Proprietary concern.
• Partnership Firm.
• Private Ltd. Company.
• Public Company.
• Any other legal forms.
• Address Proof
• Passport size photograph
• Applicant Signature
• Proof of Identity / Address of Business Enterprises

After Successful Registration

For shishu loan.

• Proof of Identity – Self- attested copy of Voter’s ID Card / Driving Licence / PAN Card / Aadhaar Card / Passport / Photo IDs issued by Govt. authority etc.
• Proof of Residence: Recent telephone bill / electricity bill / property tax receipt (not older than 2 months) / Voter’s ID Card / Aadhar Card / Passport of Individual / Proprietor / Partners Bank passbook or latest account statement duly attested by Bank Officials / Domicile Certificate / Certificate issued by Govt. Authority / Local Panchayat / Municipality etc.
• Applicant’s recent coloured Photograph (2 copies) not older than 6 months.
• Quotation of Machinery / other items to be purchased.
• Name of supplier / details of machinery / price of machinery and / or items to be purchased.
• Proof of Identity / Address of the Business Enterprise – Copies of relevant Licences / Registration Certificates / Other Documents pertaining to the ownership, identity of address of business unit, if any.

For Kishore and Tarun Loan

• Proof of Identity - Self attested copy of Voter’s ID card / Driving License / PAN Card / Aadhar Card/Passport.
• Proof of Residence - Recent telephone bill, electricity bill, property tax receipt (not older than 2 months), Voter’s ID card, Aadhar Card & Passport of Proprietor/Partners/Directors.
• Proof of Identity/Address of the Business Enterprise -Copies of relevant licenses/registration certificates/other documents pertaining to the ownership, identity and address of business unit.
• Applicant should not be defaulter in any Bank/Financial institution.
• Statement of accounts (for the last six months), from the existing banker, if any.
• Last two years balance sheets of the units along with income tax/sales tax return etc. (Applicable for all cases from Rs.2 Lacs and above).
• Projected balance sheets for one year in case of working capital limits and for the period of the loan in case of term loan (Applicable for all cases from Rs.2 Lacs and above).
• Sales achieved during the current financial year up to the date of submission of application.
• Project report (for the proposed project) containing details of technical & economic viability.
• Memorandum and Articles of Association of the company/Partnership Deed of Partners etc.
• In absence of third party guarantee, Asset & Liability statement from the borrower including Directors & Partners may be sought to know the net-worth.

Is Khadi Activity Eligible Under PMMY Loans?

Yes. MUDRA loans are applicable for any activity which results in income generation. As Khadi is one of the eligible activities under Textile sector and in case MUDRA loans are taken for income generation, the same can be covered.

Are MUDRA Loans Available For Purchase Of CNG Tempo/Taxi?

MUDRA loans would be available for purchase of CNG Tempo/Taxi, in case the applicant intends to use the vehicle for commercial purposes.

I Have A Savings Bank Account With the Bank, Would Loan Under MUDRA Be Available Based On The SB Account?

Yes. The applicant can approach the branch and apply for the loan in the format being provided by the said lending institution. The terms and conditions of the loan will be governed by the policies of the lending institution, based on the broad guidelines of RBI. The loan amount will be decided by the requirement of the proposed income generating activity and the repayment terms will be decided by the anticipated cash flow from the activity.

Under PMMY-Shishu Loans, What Is The Turn Around Time For Processing The Loan Proposal?

As per Banking Codes and Standard Board of India (BCSBI), set up by RBI, loan applications should be disposed off for credit limit up to Rs.5 lakh within 2 weeks.

Is It Required To Submit Income Tax Returns For The Preceding 2 Years For Availing Loan Of Rs. 10 Lakh Under PMMY?

Generally, IT returns are not insisted for small value loans. However, the requirement of documents will be advised by the concerned lending institutions based on their internal guidelines and policies.

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Sample project report for Mudra Loan

Project Report is required to get financing from financial institutes. Project report is essential document that promoters have to write and provide to banks. Based on project report, banks analyse the business and decide on loan sanctioning. For, taking loan financial projection is as important as existence of business.

ABC Trading Company

8TH CROSS, NO.786, MG ROAD, India Marg, Marrenhalli, Bangalore 560001

This Project Report has been designed to show future vaibility of oprations. It is a Proprietorship concern promoted by Narendra Rajiv Gandhi.

Now it is proposed to avail financial assistance from a financial institute. Hence this Project Report is presented.

INDEX OF CONTENT

Profit and loss statement, balance sheet, cash-flow statement.

• Depreciation Statement
• Borrowing and Interest Statement

Break Even Analysis

Debt service coverage ratio, analysis of return on investment.

*Note: First operating year is for 12.0 months.

Assets and Depreciation Statement

Borrowings Statement

Return on Investment = (Average Return/Capital Employed)*100 Return = Profit before tax + Depreciation + Financing Cost Capital Employed = Capital + Borrowings

Here is the sample Project Report in pdf which you can download. You can download this sample project report in PDF.

Project Report or financial projection report is prepared after considering possible results from business operations. Promoter has to prepare this document for getting loans from banks.

You can prepare project report using banking91 project report writing tool . Project report tool by banking91 helps you to prepare report which is accurate and covers all ratios required by banks. Futher, this report is not only accepted by all banks but also recommended by all banks including private and public sector banks.

You can also download project report format in excel .

Comments: 1

I generated project report using banking91 and banks accepted this report. I applied for 5 lakh loan and bank have given the money. This format is great and creating project report using banking91 tool is very easy. I will recommend to use this tool. Thanks to CA Pulkit Sharma for launching project report making tool and help us get loans.

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Project Report For MUDRA Loan

(Get an accurate & bankable Project Reports for MUDRA Loan.)

MUDRA is a lending program designed to support small businesses financially through the PMMY Scheme . In order to support banks that lend to micro and small business units engaged in production, commerce, and service operations, the Government of India (GoI) formed the Micro Units Development & Refinance Agency Ltd (MUDRA).

The applicant must deliver a project report in order to be granted a MUDRA loan. The project report for a MUDRA loan must briefly mention important information about your company, such as the firm’s history, nature, raw material procurement, size of the personnel, profit, and return on investment.

Mudra Loan Eligibility 

As part of the Pradhan Mantri Mudra Yojana (PMMY) initiative, the Indian government developed Mudra Loans to help small  business  owners finance their operating costs and satisfy their financial demands.

Anyone who runs or owns a small business is eligible to apply for a Mudra Loan.

• The owner should be at least 18 years old, with a maximum age limit of 65 years for Mudra Loans.
• The loan limit must be less than ten lakh rupees.
• It should not be a farming-related small/micro business.

Why Choose Sharda Associates For Your Project Reports?

We‘re not only providing a project report, we‘re delivering an accurate document.  Our project reports  are accepted worldwide by Banks, NBFCs, Government Agencies, Angel Investors and Venture Capitalists.

Unlimited Revisions

You can make unlimited edits according to your needs without paying any single rupee. We help you to achieve all your targets through unlimited revisions.

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You will get the  best reports  in least possible time. All the reports are customized reports, which are tailor made as per your requirements.

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Why You need Project Report For MUDRA Loan?

The Pradhan Mantri Mudra  Yojana’s Mudra loan program aims to aid small companies by providing them with financial assistance (PMMY). A government-sponsored initiative called the Micro Units Development & Refinance Agency ( MUDRA ) provides funding of up to INR 10 lakhs to persons who want to start new enterprises or expand their existing ones that are involved in manufacturing, trading, and service-related industries.

Loan under MUDRA

In accordance with the funding requirements and stage of the firm, MUDRA divides the loan programme into three general categories:

1. Shishu: Loan of upto Rs.50,000

2. Kishor: Loans of above Rs.50,000 to Rs.5 lakhs.

3. Tarun: Loans of above Rs.5 lakhs to Rs.10 lakhs.

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Contents of MUDRA Loan Project Report

Our detailed project report will include the following details. Our Mudra loan project report is professionally crafted and completely complies with both the banks’ Guidelines and the Govt. Of India

A project report well prepared increases the possibility for sanctioning loan. If you need project report for your business Contact us.

Our Project report broadly includes:

• Introduction

• Business Profile

• Market Potential

• Assumptions and Presumptions

• Estimations and projections

• Technical aspects

• Operational aspects

• Financial aspects

• Profitability and Ratio Analysis

(15-30Pages)

The MUDRA project report is valid for bank loan application up to INR 10 Lakhs. We ensure that the project report covers all the aspects and is fully complied with the guidelines issued by Government and Bank.

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Tata Capital > Blog > Loan for Business > Mudra loan for New Business

Mudra loan for new business.

India is home to the world’s third-largest startup ecosystem. New businesses and start-ups are an important pillar of our growing economy. However, often a major roadblock in starting a business is access to adequate funding due to which, innumerable good businesses don't go beyond the ideation phase.

The government recognised this problem and introduced one-of-a-kind Mudra loans under the Pradhan Mantri Mudra Yojana (PMMY). Mudra loans empower entrepreneurs to realise their business ideas and enrich the nation.

Do you have a fantastic business idea but are perplexed about funding? Read on to find out how Mudra loans can help your business take off.

What are Mudra Loans for New Business?

Mudra stands for Micro Units Development Refinance Agency. Under the PMMY, small and micro-enterprises can avail loans up to Rs. 10 Lakhs.

These loans are provided by commercial banks, cooperative banks, non-banking financial institutions (NBFCs), regional rural banks (RRBs), microfinance institutions (MFIs) and small finance banks (SFBs) to eligible enterprises.  The government provides funding to these institutions against the loans they provide.

Individuals, MSMEs or enterprises engaged in manufacturing, service or trading sectors can avail Mudra loans for startups. Here's a quick summary of how mudra loans work:

1. The government allocates a yearly sum to the above-mentioned financial institutions through intermediary units like Micro Units Development and Refinance Agency bank.

2. New businesses can then avail funds from these financial institutions with low interest and zero collateral if they meet the eligibility criteria.

3. Aspiring entrepreneurs who are unable to secure loans through traditional banking channels are also eligible for a competitive loan under this scheme.

What are the Different Modes of Funding Under the New Business Loan PM Yojana?

There are two modes of funding available for your new business under the PMMY scheme.

1. Funding Through Micro Credit Scheme

If you’re planning to start a small business with a low investment, you can consider taking a loan under this category. A maximum loan amount of Rs. 1 Lakh is available. This loan is available to individuals, self-help groups and joint liability groups.

2. Funding through Banks and NBFCs

Through this mode, startups and new businesses can obtain three kinds of mudra loans under pm yojana for new business loans:

1. Shishu Loans

Shishu loan is a perfect Mudra loan for startups. If you’re starting a new business, you can avail a loan of up to Rs. 50000 under this category for a maximum loan tenure of 6 years.

If you are applying for a Mudra Shishu loan, you need to prepare and submit a future earning potential plan for your business. You can also choose your preferred lender.

2. Kishore Loans

Under Pradhan Mantri loan scheme for new business, Mudra Kishore loans are the next offering. Mudra Kishore loans can be useful for you in a variety of circumstances, from managing working capital expenses and paying off creditors, to accessing funds to survive tough business conditions.

Under the Mudra Kishore loan, you can avail a loan amount from Rs. 50,000 to Rs. 5 lakhs. The interest rate is capped at 12% maximum, and you can repay the loan in 3-5 years. You need to submit a report on the economic sustainability of your business while applying.

3. Tarun Loans

Last in Mudra loan for startups are Tarun loans. Under this, you can obtain a loan ranging from Rs. 5 Lakhs to Rs. 10 Lakhs. You are eligible for this loan only if your business is generating an income.

The repayment tenure is flexible for Mudra Tarun loans with a maximum tenure of 6 years. Certain business sectors such as food products, textiles, and agriculture allied businesses get preference for Mudra Tarun loans. You need to submit a well-documented business plan while applying.

What are The Benefits of Mudra Loans for New Businesses?

Mudra loans offer a range of benefits for your new business.

1. No Processing Charges

You don’t have to worry about any pre-loan processing charges while applying of Mudra loans.

2. No Collateral

Mudra loans are collateral-free business loans. If you want to start a business, you can easily access the necessary funds without worrying about a collateral.

3. Flexible Repayment

You can repay the loan in flexible instalments, depending on your business finances and cash flow availability. This allows you to focus on business growth.

4. Low Interest Rates

The interest rates for Mudra loans under Pradhan Mantri loan scheme for new businesses is lower than those available through traditional loans. With lower interest to pay, you can better manage your business finances.

5. Increased Accessibility

Often in small towns and rural areas, traditional lending institutions like banks are not available. Mudra loans are available through various institutions like MFIs, SFBs, NBFCs etc. You can access Mudra loans through them even in the remote areas of the country.

6. Wide range of Loan Amounts

Under the new business loan PM Yojana, a high Mudra loan amount is available ranging from Rs. 50,000-10,00,000. Your business ideas are no longer constrained by a small range of loan amounts.

What are the Mudra Loan Eligibility Documents for New Businesses?

Here is the list of documents you need to apply for a Mudra loan:

1. Aadhar/PAN/Passport for identity proof

2. Current passport size photographs

3. Documents of any previous loan taken

4. Documents like educational documents and bank account statements for credibility

5. Balance sheet of your business for Kishore and Tarun loans

6. A well-documented business plan for Tarun loans

How to Apply for a Mudra Loan?

Follow these steps to apply for a Mudra loan for new business:

1. Evaluate your business idea and decide the mode of funding through mudra loan.

2. If you choose funding through banks or NBFCs, decide the category (Shishu, Kishore, Tarun) for Mudra loan.

3. Keep the required Mudra loan eligibility documents for new business ready.

4. You can apply directly to the lending institutions mentioned above that provide Mudra loans. Fill in the forms provided and submit the required documents.

5. You can also apply online through the Mudra loan website. Fill out and upload the forms along with the required documents.

6. Once the documents are verified by the relevant lending institution and the loan is approved, the loan amount will be credited to your bank account.

Looking for an Alternative to Mudra Loan?

New businesses and startups are the power horses of any economy. Mudra loans are introduced to remove the bottleneck of funding for new businesses. If you have a business idea in the non-agriculture sector, you can take advantage of the various benefits offered by a Mudra loan.

For new businesses, an alternative to a Mudra loan is a business loan by Tata Capital. With online application process via the Tata Capital App and

website, fast application approval and flexible repayment schedule, Tata Capital’s business loans are designed to make new businesses grow and prosper.

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PMMY - MSME Loan / SME Loan Government Schemes | SBI - Business

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Pradhan Mantri MUDRA Yojana (PMMY)

Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime Minister on April 8, 2015 for providing loans upto 10 lakh to the non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs. The borrower can approach any of the lending institutions mentioned above or can apply online through JanSamarth portal  ( www.Jansamarth.in ). Under the aegis of PMMY, MUDRA has created three products namely 'Shishu', 'Kishore' and 'Tarun' 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.

For more details click here

• Nature of Facility : Working Capital and Term Loan
• Purpose : Business purpose, capacity expansion, modernization
• Target Group : Business Enterprises in Manufacturing, Trading and Services sector including allied agricultural activities.
• Maximum loan amount : Upto Rs 10 lacs
• Loans upto Rs.50,000 are categorised as SHISHU
• Loans from Rs.50,001 to Rs.500,000 are categorised as KISHORE
• Loans from Rs.500,001/- to Rs.10,00,000/- are categorised as TARUN
• Upto Rs. 50,000/- Nil
• Rs. 50,001 to Rs. 10 lacs: 20%
• Pricing : Competitive Pricing Linked to EBLR
• TL/Dropline OD - below Rs. 5 lakh : Max. 5 years including maximum moratorium period of upto 6 months.
• TL/Dropline OD - From Rs. 5 lakh to Rs. 10 lakh : Max. 7 years including maximum moratorium period of up to 12 months.
• Nil for Shishu and Kishore to MSE Units
• For Tarun: 0.50%(plus applicable tax) of Loan amount

Customers can login and apply for Mudra loans on following Bank specific URL. https://jansamarth.in/apply/sbi

Eligibility Criteria

• Existing & New units

Other Conditions

• The loans under Mudra Scheme are guaranteed by Credit Guarantee for Micro Units (CGFMU) and the same is provided through National Credit Guarantee Trustee Company (NCGTC).
• The guarantee cover is available for five years and hence for advances granted under Mudra Scheme the maximum period is 60 months.
• Leads are now available in Udyami Mitra Portal (www.udyamimitra.in). Site can be accessed by Branches with Username and Password
• All Branches to issue MUDRA RuPay Card for all the eligible CC accounts.

• MUDRA SCHEME DESI TOYS SUCCESS STORY
• MUDRA SCHEME ART INNOVATION SUCCESS STORY
• SUCCESS STORIES OF NACHIYARKOIL BRANCH
• Success stories OF SINGJAMEI BRANCH

Last Updated On : Tuesday, 23-04-2024

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What is a Mudra Loan? Features, Eligibility & More

Everything you need to know about mudra loan.

Micro Units Development and Refinance Agency (MUDRA) loans are micro-loans that are available under the Pradhan Mantri Mudra Yojana (PMMY). MUDRA loans are targeted to aid and relieve the MSME sector by freeing them from the inconvenience of liquidity crunch.

These loans are readily made available to the concerned persons, and they are largely accessible by connecting the lending partners all across India. The type of loans under this scheme can be widely categorised into three major types on the basis of requirements like the quantum of loan and business stage

The maximum loan that can be provided under the Pradhan Mantri Mudra Yojana is around ₹ 10,00,000 and it is applied under the 'Tarun Scheme'.

An Introduction to the Project Report and its Contents

Just like any other business loan, MUDRA loans also require the borrowers to show a project report during the time of their loan application submission. The project report is an extremely important document that is required to initiate the loan application and sanction process.

The project report has to be furnished to apply for a MUDRA loan under the 'Tarun' or 'Kishore' category. The loans under the 'Shishu' scheme are most likely to be available easily to small business owners and they do not generally require the borrowers to provide a detailed project report along with their loan application.

What is a Project Report?

A project report is a document that offers a detailed account of the business proposal. It also provides the cost-benefit analysis, project implication of the proposed expenditure, and overheads for which the loan is sought.

Project report gives an overview of the project concept, scale of its activities, existing debts, project revenue, and more. The project report has to be precise and must contain valid data so that it can be easily approved and accepted by the loan authorities.

To initiate the application to obtain a MUDRA loan, the major contents in any project report that are needed are the cost of benefit analysis of the proposed expenditure, a detailed account of the business and entrepreneur, and more.

So, below mentioned are the major contents that a project report must essentially have-

• General business profile or information such as the area of products/ Business, services, achievements, duration of the existence, etc.
• The central aim, budget, and target of the proposed business enterprises and investment for the same.
• Details of the plant, machinery, equipment, and other accommodations required for initiating the business proposal or sustenance.
• Business quotation and detailed business plan from at least two sellers/ vendors specialised in the same sector.
• Types of business development and manufacturing processes that are involved in the execution of the proposed plans.
• Partner details, transportation cost, marketing, and promotional activities , strategies, and other requisites that are involved in the business of product development.
• Information about the third party participant or investors involved in project execution.
• Business revenue projections and conclusion of the report.

The aforementioned is a list of project report contents that are required by the lenders. Many loan lenders have specific requirements in terms of accepting the project reports. However, the main requisite with respect to MUDRA loan is the project report that has to be accurate and factual, or it may lead to the rejection of the whole loan application. This can also eventually affect the credit score of the borrower therefore project report has to be made with due concern and as per the guidelines.

Advantages of MUDRA Loan

Some of the most crucial advantages of MUDRA loan are mentioned below-

• The borrower gets easier access to the loan worth ₹10,00,000
• Collateral free loan
• Minimum interest rate as compared to the business loan products and other proposals.
• Comfortable repayment duration up to 5 years (or more in specific cases).
• Flexible repayment options as per the terms and conditions of the money lender.
• A revised definition of the sector (MSME) that offers a wide scope of eligibility under the scheme of MUDRA loan thereby supporting more businesses.
• Interest subvention of around 2% to 'Shishu Loan' under PMMY

A Glance at MUDRA Loan

The Pradhan Mantri Mudra Yojana was launched in 2015 with an objective to offer credit up to rupees 10 lakhs to small and medium entrepreneurs. This scheme acts as a regulator for the micro-finance institutions (Mafia).

MUDRA Yojana targets skilled workers, educated professionals, and entrepreneurs and ensures their interests. This scheme is specially designed to encourage and promote the axis of financial amenities to non-corporate small business sectors (NCSBS) that can turn them into the driving forces for Employment generation and GDP growth.

The MUDRA loan is offered under the Pradhan Mantri Mudra Yojana (PMMY) to the non-corporate micro and small businesses and non-farming enterprises. These bodies can avail of a loan up to 10 lakhs under the development of the micro-unit and refinance agency Ltd scheme. This loan is accessible in three broad categories i.e. Shishu, Kishore, and Tarun for signifying the stage of business growth, developing and funding the requirements of the beneficiary business/ entrepreneur, and to offer a reference point for the next phase of their business growth.

The features of the MUDRA loan scheme

MUDRA Yojana offers refinancing support to the banks for small businesses having a loan requirement up to rupees 10 lakhs. The applicant can approach the amount to any leading institution.

The core features of this scheme are-

1. Loan amount - The scheme considers maximum loan amount up to rupees 10 lakh, which is further segmented as-

• Loan of up to ₹ 50, 000 under the 'Shishu' category.
• A loan from ₹ 50, 001 to ₹ 500, 000 under 'Kishore' category.
• A loan from ₹ 500, 001 to ₹ 10, 00, 000 under 'Tarun'.

2. Processing- processing fee is zero for Kishore and Shishu loans. However, there is a 0.5 % loan amount for the ‘Tarun’ loan

3. Eligibility criteria - New and Existing Units

4. Repayment period - 3 to 5 years

5. Minimum Age - 18 years

6. Maximum Age - 65 years

7. Collateral - No third party security or collateral is required.

8. Documents- residency proof, identity proof, etc.

The Motive Behind Pradhan Mantri Mudra Yojana

The MUDRA loan scheme can be availed for performing multiple income-generating programs for activities like-

1. Commercial vehicle

This supports purchasing commercial transport vehicles like auto-rickshaw, tractor, taxi, trolley, goods transport vehicles, and many more.

2. Service Sector Activities

Starting any business like gym, salon, tailoring shop, repair shop, medicine shop, photocopy shop, dry cleaning shop, etc.

3. Food and Textile Sector Activities

Multiple activities involved in the food and textile sector, third party involvement, and more.

4. Traders and Shopkeepers Business Activities

Setting up service enterprises, shops, trades, business activities, non-farm incomes, etc.

5. Equipment Finance Scheme

This is for the micro-business units where the maximum loan amount is around ₹ 10, 00, 000.

6. Agri-Allied Activities

This involved the activities related to the agribusinesses or agriculture clinics, food, and agro-processing units, beekeeping, livestock rearing, dairy, fisheries, etc.

Eligible Borrowers of MUDRA Loan

The borrower of the loan should not be bankrupt or a defaulter of  any financial institution or Bank. The concerned person should also have a clean and satisfactory credit track record. Individual borrowers of the loan are required to have the necessary skills/ knowledge/ experience/ requisites to undertake the business proposition or plan. The requirements to have educational qualifications are needed for assessing the application based on the nature of the business plan or proposed activity.

• Individuals
• Proprietary concern
• Private limited company
• Partnership firm
• Public company
• Any legal firm

A MUDRA card is more like a debit card that gets issued to the borrower or loan applicant who is applying for the amount. When the loan applicant applies for the loan process, and if it gets approved then the bank or borrower can open a loan account. The loan amount is dispersed in the account so that the concerned person or borrower can debit the amount whenever required.

1) What is Business Loan? A Complete Guide. 2) How To Get Small Business Loan From Government? 3) How is the Government helping Small Businesses & Startups fight the financial crisis? 4) Schemes Initiated by the Government to Help Women Entrepreneurs

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How New Mudra Loan Limit Of Rs 20 Lakh Will Support MSMEs, Who Can Avail The Scheme | Explained

Curated By : News Desk

Last Updated: July 23, 2024, 19:29 IST

New Delhi, India

Finance minister Nirmala Sitharaman also said SIDBI will open new branches to expand its reach to serve all major MSME clusters within three years and provide direct credit to them. (Image: PTI)

Finance minister Nirmala Sitharaman said credit availability for MSMEs during their stressed period will be provided from the government-promoted fund

In the Budget 2024, Micro, Small, and Medium Enterprises (MSMEs) will now be able avail loans of up to Rs 20 lakh instead of the current Rs 10 lakh under the Mudra scheme, finance minister Nirmala Sitharaman said on Tuesday. This is also applicable to those who have successfully repaid loans previously taken under the Tarun category.

The finance minister further said that credit availability for MSMEs during their stressed period will be provided from the government-promoted fund.

The turnover threshold of buyers for mandatory onboarding on the TReDS platform will be slashed from Rs 500 crore to Rs 250 crore, she added. The Budget also has provisions for financially supporting 50 multi-product irradiation units in the MSME sector.

Sitharaman was presenting the budget for the third term of the Narendra Modi government. The theme of this year’s budget focuses on employment, skilling, MSMEs and the middle class, she said.

During the interim budget presentation earlier this year, the government extended 43 crore loans aggregating to Rs 22.5 lakh crore under the PM Mudra Yojana.

What is Mudra Loan Scheme?

Pradhan Mantri MUDRA Yojana (PMMY) was launched on April 8, 2015, by Prime Minister Narendra Modi to facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.

MUDRA products include ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur. The financial limit for these schemes are: up to Rs 50,000 under the Shishu category, 50,000 to 5 lakh under Kishor category and 5 lakh to 10 lakh under the Tarun category.

Loans under PMMY are provided by Member Lending Institutions (MLIs) — banks, non-banking financial companies (NBFCs), microfinance institutions (MFIs) and other financial intermediaries.

Those eligible for assistance from MUDRA include Non-Corporate Small Business Segment comprising millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.

What are the Objectives of MUDRA?

To sanction loans up to Rs 10 Lakh to those who have a business plan to generate income from a non-farm activity like manufacturing, processing, trading, or service sector but don’t have enough capital to invest.

To help generate sources of employment and increase the overall GDP by providing micro-enterprises with credit facilities.

With the help of MUDRA bank, the network of microfinance institutions will be monitored and new registration will also be done.

Integration of informal economy into formal sector will help India also grow its tax base as incomes from the informal sector are non-taxed.

Schemes For Supporting Other Activities

Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, scheduled tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Mission, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up, she said.

To improve the socio-economic condition of tribal communities, she said, “We will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefitting 5 crore tribal people.”

She also said SIDBI will open new branches to expand its reach to serve all major MSME clusters within three years and provide direct credit to them.

(with inputs from agencies)

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Credit guarantee to Rs 20 lakh Mudra loan: FM on MSMEs in Budget 2024

Union budget 2024-25: finance minister nirmala sitharaman announced the continuation of bank credit to micro, small, and medium enterprises (msmes) during stress periods.

The Economic Survey said MSMEs face extensive compliance requirements and significant bottlenecks with access to affordable and timely funding being some of the core concerns.

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Credit guarantee scheme for msmes, continuation of bank credit during stress periods, more from this section, union budget 2024: kaveri seed up 14%; govt to release high yielding crops, budget 2024: centre announces paid internship scheme in top 500 companies, budget 2024: fm announces 3 schemes under employment-linked incentives, budget 2024: sitharaman outlines 9 priorities for 'viksit bharat 2047' goal, budget 2024: govt sets aside rs 1.52 trn for agriculture, allied sectors, expansion of sidbi's reach, increase in mudra loan limit, e-commerce export hubs, reduced turnover threshold for treds, support for multi-product food irradiation units, what did the economic survey 2023-24 say about msmes.

• Addressing the credit gap: Ensuring MSMEs have access to affordable credit.
• Deregulation: Reducing the regulatory burden to foster growth and innovation.
• Improving connectivity: Enhancing physical and digital infrastructure to support MSMEs.
• Developing an export strategy: Helping MSMEs expand into international markets.
• In the Union Budget 2023-24, the finance minister had announced the allocation of Rs 22,137.95 crore for the MSME ministry. This was a 41.6 per cent increase from the previous financial year.

Budget 2024 LIVE: Angel tax to be abolished, announces FM Nirmala Sitharaman

Budget 2024 stock market news live: sensex down 800 pts; govt to levy long-term capital tax of 12.5%, climate change, employment, e-commerce: how analyst decode budget 2024, cdsl, kaveri seeds in focus post budget 2024 proposals: samco securities, budget 2024: hostels, skilling among initiatives for women in workforce.

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Budget 2024: Loans limit under PM Mudra Yojana enhanced to ₹20 lakh

During the interim budget presentation earlier this year, the government extended 43 crore loans aggregating to ₹22.5 lakh crore under the PM Mudra Yojana

Updated - July 23, 2024 01:02 pm IST

Published - July 23, 2024 11:51 am IST

Mudra loan cheque being presented to a group of women in Ongole. File image. | Photo Credit: The Hindu

As part of the nine priorities highlighted for the 2024 Union Budget , the limit of Mudra loans limit will be enhanced to ₹20 lakh from the current ₹10 lakh for those who have availed and successfully repaid loans previously taken under the Tarun category, Union Finance Minister announced on July 23.

Ms. Sitharaman was presenting Prime Minister Narendra Modi-led government’s first budget of the third term. The theme of this year’s budget focuses on employement, skilling, MSMEs and the middle class, she said.

Also Read: Budget 2024 Live updates

Pradhan Mantri MUDRA Yojana (PMMY) was launched on April 8, 2015, by Prime Minister Narendra Modi to facilitate easy collateral-free micro-credit of up to ₹10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.

Loans under PMMY are provided by Member Lending Institutions (MLIs) — banks, non-banking financial companies (NBFCs), microfinance institutions (MFIs) and other financial intermediaries

Finance Minister Nirmala Sitharaman today presented the Union Budget 2024 in Parliament, marking her seventh consecutive budget. She listed out the following nine priorities for the FY 2024-25 Union Budget: productivity and resilience in agriculture, employment and skilling, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation research development, and next generation reforms

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Union Budget / loans

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Mudra loans limit doubled to Rs 20 lakh in huge boost to MSMEs

Nirmala sitharaman announced that a new mechanism has been introduced to ensure the continuation of bank credit to support msmes during challenging times..

Listen to Story

• Budget 2024-25 focuses on MSMEs
• Mudra loan limit increased from Rs 10 lakh to Rs 20 lakh
• New bank credit mechanism for MSMEs announced

The Union Budget 2024-25, presented today, has put significant emphasis on the Micro, Small, and Medium Enterprises (MSMEs) sector and labour-intensive manufacturing. Finance Minister Nirmala Sitharaman announced that the limit for Mudra (Micro Units Development & Refinance Agency Ltd) loans will be enhanced from Rs 10 lakh to Rs 20 lakh.

Read Full Budget 2024 Coverage

Nirmala Sitharaman also announced a new credit guarantee scheme aimed at helping MSMEs purchase machinery and equipment without needing collateral or third-party guarantees. This initiative, presented during her Budget speech in the Lok Sabha, emphasises the government's focus on supporting labour-intensive MSME units and manufacturing sectors.

Sitharaman announced a comprehensive package for MSMEs that includes financing, regulatory changes, and technology support to foster growth and enhance global competitiveness.

"A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to Rs 100 crore, while the loan amount may be larger," Nirmala Sitharaman said.

Borrowers will need to pay an upfront guarantee fee and an annual fee based on the reduced loan balance. Additionally, a new mechanism will ensure continuous bank credit for MSMEs during stressful periods. This support aims to prevent MSMEs from becoming non-performing assets (NPAs) due to factors beyond their control, offering credit backed by a government-promoted fund.

Sitharaman also announced a new credit assessment model for MSMEs. Public sector banks will develop in-house capabilities to assess MSME creditworthiness, moving away from reliance on external assessments. This new model will evaluate MSMEs based on their digital footprints and is expected to be more effective than traditional asset or turnover-based criteria, even covering those without formal accounting systems.

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Budget 2024: A big push for MSMEs

Budget boosts msmes with credit guarantee scheme, mudra loan increase, treds expansion, and sidbi branch expansion for growth.

By K Ram Kumar

The Union Budget has given a leg-up to MSMEs (micro, small and medium enterprises) via proposals to introduce a credit guarantee scheme for facilitating term loans for purchase of machinery and equipment without collateral or third-party guarantee and a guarantee from a government-promoted fund to provide credit support during stress period.

• Also read: Indices recover despite STT, capital gains tax hike

Further, public sector banks will be required to build in-house capability to assess MSMEs credit needs, instead of relying on external assessment. Also, the Mudra loan limit under the “Tarun” category has been doubled to ₹20 lakh.

“This Budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. We have formulated a package covering financing, regulatory changes and technology support for MSMEs to help them grow and also compete globally, as mentioned in the interim Budget,” Finance Minister Nirmala Sitharaman said.

The credit guarantee scheme for MSMEs in the manufacturing sector will operate on pooling of credit risks of such enterprises.

“A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ₹100 crore, while the loan amount may be larger. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reducing loan balance,” the Minister said.

Sitharaman announced a new mechanism for facilitating continuation of bank credit to MSMEs during their stress period.

“While being in the ‘special mention account’ (SMA) stage (accounts showing signs of incipient stress) for reasons beyond their control, MSMEs need credit to continue their business and to avoid getting into the NPA (non-performing asset) stage.

“Credit availability will be supported through a guarantee from a government promoted fund,” she said.

The Finance Minister wants public sector banks to take a lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy.

• Also read: Budget 2024: Govt eyes self-sufficiency in pulses production

“This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. That will also cover MSMEs without a formal accounting system,” she said.

Mudra loans

The limit of Mudra loans will be doubled to ₹20 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.

Debadatta Chand, MD & CEO of Bank of Baroda, observed that the banking sector has substantial positive takeaways from the Budget which goes beyond the neutral impact on liquidity.

“There is a focus on MSMEs with a credit guarantee scheme being brought in. Any support to the MSMEs will be positive for growth of not just GDP but also employment,” he said.

KV Srinivasan, Executive Director and CEO, Profectus Capital Pvt Ltd, said: “This Budget is a bonanza for MSMEs. Measures like vastly enhanced credit guarantees up to ₹100 crore and an increase in Mudra limits should facilitate capital expenditure for the expansion and modernisation of MSMEs in the manufacturing sector. “

TReDS platform

For facilitating MSMEs to unlock their working capital by converting their trade receivables into cash, the Budget has proposed reduction in the turnover threshold of buyers for mandatory onboarding on the TReDS (Trade Receivables Discounting System) platform from ₹500 crore to ₹250 crore.

This measure will bring 22 more CPSEs (central public sector undertakings) and 7,000 more companies onto the platform. Medium enterprises will also be included in the scope of the suppliers.

Srinivasan said wider coverage of TReDS and credit for MSMEs in the early stage of stress should help them manage working capital and cut cash flow cycles.

SIDBI branches

Government-owned SIDBI will open new branches to expand its reach to serve all major MSME clusters within three years, and provide direct credit to them. With the opening of 24 such branches this year, the service coverage will expand to 168 out of 242 major clusters, the FM said.

Related Topics

• Union Budget

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Mudra Loan: Who can avail? Eligiblity?

Any individual running non-corporate non-farming business activities can apply for a MUDRA loan under the Pradhan Mantri Mudra Yojana Scheme .  The following are the Mudra Loan Eligibility criteria:

• Applicants should have an age limit of 18 years and a maximum of 65 years.
• Individuals, startup firms, business owners, entrepreneurs, SMEs, and MSMEs are eligible.
• Traders, Artisans, Manufacturers, Retailers, etc. engaged only in trading, services, and manufacturing sectors are also eligible.
• If the applicant’s requirements in less than 10 lakh.
• Applicants with good repayment history, and no bank dues.
• People belonging to the SC/ST/OBC category.
• Applicants with no loan defaults with any financial institution.

The following business bodies are eligible for Mudra Loan:

1. Business vendors and shopkeepers:

Shopkeepers and vendors like fruits and vegetable vendors can apply for a loan ranging up to ₹ 10 Lakh.

2. Service Sector Units: 

Beauty parlours, boutiques, parcel services, automobile repairs, dry cleaning, gymnasiums, saloons, tailoring units, etc.

3. Textile industry:  

Textile industries such as handloom, knitting, silk work, apparel design, embroidery, traditional dying, etc. can get monetary help from mudra loans.

4. Food production sector: 

Start us dealing in food processing, shops, food parcel services, or cold storage can avail this mudra loan and expand their business.

5. Agricultural activities:  

Loans under this scheme can be availed for agricultural activities such as dairy farming, poultry, fishing, and the improvement of small canals and wells.

6. Vehicle: 

Loans will be available to purchase passenger cars, goods transport vehicles, and three-wheelers.

The eligibility documents for the Mudra loan vary for different loan purposes. The documents required for specific purposes are as follows:

• Documents for Vehicle Loan
• Duly filled application form for Mudra Yojana
• Vehicle loan application form
• 2 passport-size photos of the applicant
• Identity proof such as an Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
• Address proof such as an Aadhaar Card, Passport, Bank statements, telephone or electricity bill.
• Income proof
• Lastly, bank statement for the latest 6 months

2. Documents for Business Instalment Loan

• Loan application form
• Residential Address proof such as an Aadhaar Card, Passport, Bank statements, telephone or electricity bill.
• Proof of ownership of the enterprise or residence.
• Trade references
• Proof of qualification, establishment, and business continuity
• 2 years ITR and CA certified financials
• Bank statement for the last 6 months

3. Documents for Business Loan

• Identity and Age proof such as Aadhaar Card, Passport, Voter ID Card, Driving License, etc.
• Residential Address proof such as an Aadhaar Card, Passport, Bank statements, telephone or electricity bill
• Proof of ownership of the enterprise or residence
• Bank statement for the last 12 months
• Proof of business continuity
• Income tax return for recent 2 year

Is the Agriculture sector Eligible for Mudra Loan?

MSMEs include the agricultural sector, but only a few types of businesses in the agricultural sector are eligible for Mudra Loan:

• Agribusiness centers
• Agriclinics
• Food and agri-produce business

Must Read: MUDRA Loan Application Form

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Enhanced mudra loans and new credit models, MSME sector receives attention in Budget 2024-25

The union budget 2024-25 has given special attention to the underserved msme sector..

• Updated Jul 23, 2024, 1:16 PM IST

In the first Union Budget announcement by Finance Minister Nirmala Sitharaman following Prime Minister Narendra Modi’s third term, the micro, small, and medium enterprises (MSMEs) sector received significant attention, with a particular focus on the enhancement of Mudra loans.

The Union Budget 2024-25 has been described as giving special attention to this underserved sector. Here’s a detailed look at what was announced for this key growth engine of the economy.

Track Budget 2024 updates real-time with BT's non-stop live streaming of India's most-important event from 8 am to 7 pm

Credit Guarantee Scheme for MSMEs and Manufacturing Businesses

This scheme is designed to support MSMEs by facilitating the purchase of machinery and equipment. It offers term loans for MSMEs in the manufacturing sector to buy machinery and equipment without requiring collateral or a third-party guarantee. A self-financing guarantee fund will provide coverage up to ₹100 crore per applicant, with borrowers required to pay an upfront and annual guarantee fee based on the reducing loan balance.

New Assessment Model for MSME Credit

Public sector banks will enhance their in-house capabilities to assess the creditworthiness of MSMEs using new credit assessment models based on digital footprints rather than traditional metrics like turnover. This will also cover MSMEs without a formal accounting system.

Credit Support During Stress Periods

A new mechanism will ensure continued bank credit to MSMEs during stressful periods, particularly when they are in special mention accounts (SMA) due to uncontrollable circumstances, helping them avoid falling into non-performing asset (NPA) status.

Enhanced Limit for Mudra Loans

The limit for Mudra loans will be increased to ₹20 lakh from the current ₹10 lakh for entrepreneurs who have successfully repaid previous loans under the ‘Tarun’ category.

Mandatory Onboarding for Working Capital

To help MSMEs unlock working capital, the turnover threshold for mandatory onboarding on the TReDS platform will be reduced from ₹500 crore to ₹250 crore. This change will bring 22 more central public sector enterprises (CPSEs) and 7,000 additional companies onto the platform.

Expansion of SIDBI Branches

SIDBI will open new branches to serve all major MSME clusters within three years, with 24 new branches opening this year, expanding service coverage to 168 out of 245 major clusters.

Support for Food Irradiation and Testing Units

Financial support will be provided to establish 50 irradiation units in the MSME sector to enhance quality and safety testing. Additionally, the setup of 100 NAB-accredited food quality and safety testing labs will be facilitated.

E-commerce Export Hubs

E-commerce export hubs will be established through public-private partnerships to enable MSMEs and traditional artisans to sell their products in international markets. These hubs will provide a seamless regulatory and auditing framework to facilitate trade and export-related services.

Ease of Doing Business

To enhance the ‘Ease of Doing Business’, the government is working on the Jan Vishwas Bill 2.0. Additionally, states will be incentivized for implementing their Business Reforms Action Plans and for digitalization efforts.

With enhanced Mudra loans, new credit models, and various supportive measures, Sitharaman stated that the government aims to strengthen the MSME sector, helping it grow and compete globally.

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Budget 2024: FM Extends Credit Support for MSMEs

In the Union Budget 2024, Finance Minister Nirmala Sitharaman announced a new credit guarantee program for MSMEs to enable the growth of medium, small, and micro enterprises. The scheme will allow MSMEs to access credit without collateral or any third-party guarantees.

On credit guarantee schemes for MSMEs in manufacturing, FM said, "To facilitate term loans for MSMEs for the purchase of machinery and equipment without collateral and guarantee, a new scheme will be introduced. This guarantee fund will provide guarantees of up to Rs 100 crore."

The Finance Minister said that the limit of MUDRA loans will be increased to Rs 20 lakh from the current Rs 10 lakh for those who have availed and successfully repaid loans under the TARUN category. The MSME sector was one of the hardest hit by the COVID pandemic and such state-backed loans would make banks more comfortable in lending to them, the FM said.

Public sector banks will take the lead in developing credit assessment models for MSMEs. Small Industries Development Bank of India (SIDBI) will open new branches to serve more MSMEs over a period of three years. The apex regulatory body will set up 25 new branches in FY25.

In addition, Sitharaman announced that e-commerce export hubs will be developed to promote international trade of MSMEs through public-private partnerships.

“MSMEs consume approximately 50 per cent of nation's power needs and generate over 75 per cent of GHG emissions. While the budget has committed support to MSMEs to grow and compete globally, additional support is required for the greening of the MSME sector, including easier access to climate financing,” said Sameer Jain, Managing Director at Primus Partners.

“It will be interesting to see the details of the provisions for uses of Credit Guarantee Schemes especially for Green projects,” he added.

The Finance Minister also announced that the government will also focus on increasing women's participation in the workforce, by setting up hostels and creating partnerships to organize women-specific skilling programs.

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