Affiliated Banks For Mudra Yojana Loan
As part of the credit empowerment and enhancement activity of the country, the 2015 Union budget officially launched a Pradhan Mantri Mudra Yojana scheme targeting to provide financial support and services to the ‘Micro units’ or the small start-ups and growing enterprises of the country.
Now the micro-units that serve as target clients to PMMY are eligible to avail these funding services from the lending institutions that are legally approved to do so. And these lending institutions or affiliated banks are referred to as ‘MUDRA Banks’ that specifically serve those enterprises that have not received any financial attention from the regular banks in the area or that are located in remote areas without any real exposure to actual and helpful financial assistance for their upcoming venture.
Skeleton structure of approaching the banks
- The initial challenge is to find out the institution of your choice through which you may prefer to avail the services under the Mudra Yojana scheme in your regional locality.
- While doing this, one has to keep in mind the probable lending institute facilities that have been broadly defined by the government (an exhaustive list is discussed below).
- Finally, your eligibility criteria as a possible ‘borrower’ under the scheme is checked and the respective developmental strategies and financial requirements within the categorical classification are suitably met as per the set down provisions of the Mudra Yojana loan scheme.
This is then followed by providing and implementation of the financial services in terms of the demands of the enterprise in question under either the Shishu or Kishore or Tarun category of PMMY.
The lending institutes approved (broadly defined)
Out of the available pool of banking and financial institutes available in the country, the following are government approved to act as the ‘lending body’ for the Mudra Yojana, loan scheme by the government:
- Scheduled commercial banks- private sector and public sector.
- Regional rural banks (RRBs)
- Scheduled union co-operative banks.
- Scheduled state co-operative banks.
- Micro finance institutions (MFIs)
- NBFCs, societies and trusts.
These operate across the country and can extend credit availability under the MUDRA scheme having confirmed the eligibility criteria for the same from MUDRA website.
Note that, to channelize quality financial assistance to the borrowing micro units, the local branch of the above institutes follows the eligibility norms of the same sanctioned for assistance by the government, under the scheme.
- Under the scheme, 97 nodal officers have been appointed to the local branch offices of SIDBI banks who then become the ‘first person contact’ for Mudra scheme.
- The shortlisted lending institutes that cleared the eligibility tests for Mudra Yojana scheme further can avail the following provision:
- The institutions need to submit their latest financial records to inform their position and subsequently submit the loan application for getting hold of the assistance under this scheme.
- The MFIs, though registered in a specified center can also operate in other centers by the by laws of the state.
Extent of Participation of the banks and institutes
Under Mudra Yojana loan scheme, the participants have been constrained by certain legal clauses as far as the provision of financial assistance is concerned.
- Scheduled commercial banks
-Both private and public sector.
-The profitable track record for the past consecutive three years of operation and service.
-Net NPA not exceeding 3% and CRAR not less than 9%.
-Minimum net worth of Rs.100 crore.
- Regional rural banks
-NPA within 3%.
-Profitable operations and no accumulated losses and CRAR greater than 9%.
- Been into lending for micro-units with loan up to Rs.10 lakhs for at least three
- The promoters and management have at least ten years of experience in such area of practice.
- Atleast 3,000 existing borrowers.
- Having suitable internal systems of management and accounting.
- The minimum CRAR norms and mandatory RBI guidelines are complied with.
- Member of a credit
Thus, once the specified eligibility criteria are met with by the respective bank or institution, they are approved as a ‘lending body’ under PMMY. Note that while applying to the affiliated banks:
- A sample business plan structured around your vision and mission as well as the expected future prospects of the venture if done along a specified line of operations is a must for applying to this institutionalized government scheme.
- A personal visit to the nearest located, preferred and approved lending institute providing the services under the scheme is another must.
- Proof of identity, address, and recent passport size photo along with the prescribed formalities of the banks has to be submitted and followed through.
This will ultimately result in a smoother loan sanction and availability under the scheme from the respective lending institute.