SBI Mudra Loan: A Guide for Small Businesses

What is SBI Mudra Loan?

SBI Mudra Loan is a special scheme launched by the State Bank of India (SBI) under the Pradhan Mantri Mudra Yojana (PMMY) to provide loans to micro, small and medium enterprises (MSMEs) in India. The word ‘Mudra’ stands for Micro Units Development and Refinance Agency, which is a government agency that supports the MSME sector. The main objective of SBI Mudra Loan is to help small businesses grow and create more jobs in the country.

What are the types of SBI Mudra Loan?

SBI Mudra Loan has three types, based on the loan amount and the stage of the business. They are:

  • Shishu: This is for businesses that are just starting or need a small amount of money. The maximum loan amount under this category is Rs. 50,000.
  • Kishore: This is for businesses that have already started and need some more money to expand or improve. The loan amount under this category ranges from Rs. 50,001 to Rs. 5,00,000.
  • Tarun: This is for businesses that are well established and need a large amount of money to grow further or diversify. The loan amount under this category ranges from Rs. 5,00,001 to Rs. 10,00,000.

What are the features of SBI Mudra Loan?

Some of the features of SBI Mudra Loan are:

  • The loan can be used for any business purpose, such as buying machinery, raw materials, inventory, working capital, marketing, etc.
  • The loan can be availed by any individual or entity engaged in manufacturing, trading or service sector, including allied agricultural activities.
  • The loan does not require any collateral or security, which means the borrower does not have to pledge any asset to get the loan.
  • The loan has a competitive interest rate, which is linked to the Marginal Cost of Funds based Lending Rate (MCLR) of SBI. The current MCLR of SBI is 6.65% per annum.
  • The loan has a flexible repayment period, which can be up to 5 years, including a moratorium of up to 6 months, depending on the activity and income generation of the business.
  • The loan has a low processing fee, which is nil for Shishu and Kishore loans, and 0.50% (plus applicable tax) of the loan amount for Tarun loans.

How to apply for SBI Mudra Loan?

The process of applying for SBI Mudra Loan is simple and easy. The steps are:

  • The borrower has to visit the nearest SBI branch or SBI e-Mudra portal and fill up the application form with the required details, such as name, address, business name, type, loan amount, etc.
  • The borrower has to submit the application form along with the necessary documents, such as proof of identity, proof of address, proof of business, bank statement, income tax returns, etc.
  • The bank will verify the application and the documents and assess the eligibility and creditworthiness of the borrower.
  • If the application is approved, the bank will sanction the loan and disburse the amount to the borrower’s account.

What are the benefits of SBI Mudra Loan?

SBI Mudra Loan has many benefits for small businesses, such as:

  • It helps them to start, expand or improve their business without any hassle or delay.
  • It enables them to access credit at a low cost and without any collateral or security.
  • It empowers them to become self-reliant and generate more income and employment opportunities.
  • It supports them to contribute to the economic growth and development of the country.

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