Guarantee In Mudra Loan
The facility of Mudra loans was intended to facilitate Indian citizens to open a new business or to grow the established businesses. With this intention Mudra Bank was launched on 8 April, 2015 with a fund of Rs 20,000 crore. The main attraction is that there is no need of guarantee in Mudra loan.
How Can MUDRA Bank Make a Difference to the Economy?
Most of the individuals, particularly those living in rural as well as interior parts of India, have been expelled from the advantages of formal banking system. So, they never had right to use to insurance, credit, loans and other financial instruments to assist them to set up as well as grow their micro businesses. So, most of the individuals depend on local money lenders for the credit. The loan comes at high interest as well as often with intolerable conditions, which make these poor unsuspicious people fall in a debt-trap for generations. When businesses fail, the borrowers become susceptible to the lender’s strong-arm tactics as well as other structure of humiliation. For these people MUDRA loan will act like a boon.
Initially, sector-specific schemes will be restricted to “Land Transport, Community, Social & Personal Services, Food Product and Textile Product sectors”. Over time, latest schemes will include more sectors.
Mudra loan will really help people with weak financial status to grow their businesses, which they wanted for years. And all they will do without any guarantor as there is no need of any guarantee in Mudra loan.
The procedure to take loan is also very simple, you just have to visit a bank and then they will help you to finish in the whole procedure.
Mudra Loans can be taken for:
Business Installment Loan: Loans for the need of working capital, purchasing plant as well as machinery, refurbishing offices and so forth. Vehicle loans: Car, Commercial vehicle and 2-wheeler loan; business loans/group loans as well as rural business credit
Bank branches will provide loans under the Mudra loan scheme according to the requirements of the customers. Loans provided under Mudra Loan scheme are guarantee-free loans. Therefore, anybody can enjoy the facility of Mudra loans without providing any guarantee to the bank from which loan will be taken.
With the facility of Mudra Loans people can now easily grow their businesses or open a new business after simple paper work. This initiative of the government of India is helping people in large numbers.