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Introduction

The Government of India has launched a financial scheme called Pradhan Mantri Mudra Yojana (PMMY) that offers financial support to small and micro enterprises. This scheme has been introduced to bring business enterprises into the formal financial system. The businesses must generate income and create employment opportunities. This is mainly targeted at non-farming industries but allied agricultural businesses can apply for this loan. More details can be read below.

What is Mudra Loan?

Bank Of Baroda Mudra Loan

Mudra Loan is a financial initiative taken by the Government of India to assist micro units and provide them with sufficient funds to develop their business. Many a time, MSMEs (Micro, Small and Medium Enterprises) find it impossible to get financial assistance from banks due to lack of security or inability to repay the loan. In the interest of developing the country’s economy, supporting these units will result in an overall progress.

The Mudra Loan can be used for the following purposes:

The scheme focuses on priority lending for women, backward classes, minorities, Dalits and Tribals who have been traditionally struggling for this kind of finance. All businesses involved in non-farm income generating activity whose credit requirement is less than Rs. 10 lacs can use this loan. There is no requirement of collateral with Mudra Loans. Under PMMY, Mudra Loans are provided by 27 Public Sector Banks, 31 Regional Rural Banks, 17 Private Sector Banks, 36 Microfinance Institutions, 25 Non-Banking Financial Institutions and 4 Co-operative Banks.

Bank of Baroda Mudra Loan – Benefits

Some of the key benefits of Bank of Baroda Mudra Loan are:

  • As a small and micro enterprise, this loan is available if there is income generation.
  • There is no requirement of security or collateral to apply for Mudra loan.
  • Bank of Baroda does not levy processing charges for this loan.
  • The credit extended under this scheme can be used for many purposes in the business. For instance, the credit can be used for term loans, overdraft facility, applying letters of credit and bank guarantee.
  • Bank of Baroda Mudra Loan does not have a minimum amount.

Bank of Baroda Mudra Loan – Features

The main features of Bank of Baroda Mudra Loan are:

  • There are three types of Mudra loan offered by Bank of Baroda:
CategoryLoan Amount
ShishuLoans up to Rs. 50,000
KishoreLoans between Rs. 50,000 and Rs. 5 lacs
TarunLoans between Rs. 5 lacs and Rs. 10 lacs
  • The maximum amount of loan that can be taken under this scheme is Rs. 10 lacs.
  • Bank of Baroda Mudra loan cannot be offered to enterprises engaged in farming activities however can be extended to allied agricultural activities like horticulture and fisheries.
  • The interest rate on this loan is determined by the Marginal Cost of Lending Rate.
  • Bank of Baroda offers the option of applying for Mudra Loan online on its official website.

Bank of Baroda Mudra Loan – Eligibility

Bank of Baroda has listed the following eligibility criteria for Mudra Loans:

  • Any non-farming enterprise can apply for this loan.
  • The business needs to be categorised as Micro Enterprise or Small Enterprise
  • The business must be income generating one.
  • The enterprise must be engaged in manufacturing, trading or services.
  • Credit needs of the business should not exceed Rs. 10 lacs.

Bank of Baroda Mudra Loan - Documents Required

The following documents have to be submitted while applying for Bank of Baroda Mudra Loan:

  • Proof of identity - Self certified 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 SC/ST/OBC/Minority. 
  • 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.
  • Applicants 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.
  • Photos (two copies) of Proprietor/ Partners/ Directors.

FAQs

1. What is Bank of Baroda Mudra Loan?

Bank of Baroda Mudra Loan offers financial assistance to small and micro enterprises in the non-farming sector and engaged in manufacturing, trading or services domain.

2. What are the types of Bank of Baroda Mudra Loan?

There are three types of Bank of Baroda Mudra Loan:

CategoryLoan Amount
ShishuLoans up to Rs. 50,000
KishoreLoans between Rs. 50,000 and Rs. 5 lacs
TarunLoans between Rs. 5 lacs and Rs. 10 lacs

3. What is the processing fee for Bank of Baroda Mudra Loan?

Bank of Baroda does not charge processing fees for this loan.

4. What are the eligibility criteria for this loan?

Bank of Baroda has put down a list of eligibility criteria for Mudra loan:

  • Any non-farming enterprise can apply for this loan.
  • The business needs to be categorised as Micro Enterprise or Small Enterprise
  • The business must be income generating one.
  • The enterprise must be engaged in manufacturing, trading or services.
  • Credit needs of the business should not exceed Rs. 10 lacs.

Customer Reviews

4 / 5 (2 Reviews)
13 May 2020

Usefulness of information,AWESOME

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