Micro Units Development and Refinance Agency is a nonbanking financial institution that supports the development and refinancing of micro enterprises. MUDRA, a microcredit program initiated by the Government of India for micro- and small businesses, provides credit of up to Rs.10 Lakh. MUDRA offers refinancing support to Microfinance Institutions (MFIs), NBFCs, and banks under the Pradhan Mantri MUDRA Yojana (PMMY) scheme.
MUDRA Loans for Women
MUDRA Loans for Women are available to women-owned businesses in the manufacturing, trading, and service sectors. Loan amounts range from Rs.50,000 up to Rs.10 lakh, depending on the eligibility of the business. These loans are provided by all Public Sector Banks (PSBs), NBFCs, Regional Rural Banks, MFIs, State Cooperative Banks, and Urban Cooperative Banks.
Mahila Udyami Scheme is a MUDRA initiative for women entrepreneurs. PMMY is also available to women entrepreneurs and offers a subsidized rate of interest.
Pradhan Mantri Mudra Yojana PMMY Scheme for Women
PMMY offers loans for a variety of purposes. The main objective is to generate income and create jobs.
The company offers three categories of loans: Shishu, Kishor, and Tarun.
- Shishu Scheme offers loans of up to Rs.50,000 to aspiring entrepreneurs to help them start their businesses.
- Kishor Scheme offers loans ranging from Rs.50,001 up to Rs.5 lakh to businesses that are already established and need additional funding to mobilize their enterprise.
- Tarun Scheme offers loans between Rs.5 lakh and Rs.10 lakh for established businesses that wish to upgrade or expand.
MUDRA guarantees that 60% of loans will go to Shishu units, and the remainder to Kishor or Tarun enterprises. Loans are available in four different forms: Term Loans, Overdraft Facilities, Working Capital Loans, and Composite Loans. The loan amount must be used for marketing, capital acquisition, or working capital. The loan can be paid back in 36 equal monthly installments (EMIs).
MUDRA Loans Are Available to Women-Owned Businesses
- Land Transport-Related Businesses – To buy vehicles such as cars, three-wheelers, e-rickshaws, and passenger cars.
- Personal Service Businesses – Salons, beauty salons, gyms, boutiques, dry cleaning, bike and motorcycle repair, DTP, xerox, medical services, courier services, etc.
- Food-Related Businesses – Any food manufacturing-related businesses such as papad making, pickle making, jam/jelly making, sweet shops, small food stalls, catering and canteen services, cold storage facilities, ice making units, ice cream making units, biscuit, bread, and bun making, etc.
- Textile-Related Businesses – Handlooms, power looms, embroidery, computerized and hand-embroidered work, apparel design and knitting, cotton ginning and stitching, and other non-garment-related businesses such as bags, vehicle accessories, and furnishing accessories.
MUDRA Loans Are Available to Women Who Qualify
- You must be an Indian citizen.
- You must have a business plan for a micro-business or a new venture in the manufacturing, processing, trade, or service sectors.
- The business plan should generate employment and income.
- MUDRA loans are available to housewives as well. They must also have a solid business plan.
- You must require a credit of less than 10 lakh rupees.
MUDRA Loans for Women Interest Rate
A Mudra Loan Interest Rate are set by the lending banks. MUDRA guidelines require that rates be reasonable.
Women applicants are eligible for a 25bps reduction in interest rates.
How to Apply for MUDRA Loans for Women?
Applicants can either apply in person at any bank of their choice, including private banks, NBFCs, RRBs, MFIs, state cooperative banks, and urban cooperatives.
Documents Required to Apply for MUDRA Loans for Women
Shishu Loans
- Identity Proof
- Residence Proof
- Two photographs
- Proof of Business
- Quote for the purchase of machinery and equipment
Documents Needed for Kishor or Tarun Loans
- Identity Proof
- Residence Proof
- Two photographs
- Proof of Business
- Quote for the purchase of machinery and equipment
- For existing businesses: Unaudited balance sheets for the last two years (for loans over Rs.2 lakh).
- For new businesses: Projections for one year (for loan amounts above Rs.2 lakh).
Mahila Udyami Scheme
Mahila Udyami Scheme is another financial assistance scheme for housewives under MUDRA business loan. This loan is designed for industrialists, housewives, and entrepreneurs to expand or start their businesses.
Mahila Udyami Scheme offers financial assistance for the establishment of a new business, expansion or modernization of existing businesses, and acquisitions such as furniture, plants, and machinery to meet day-to-day expenses and working capital requirements.
Margin and Loan Amount
The scheme will provide a maximum loan of Rs.10 lakh. The loan amount depends on the need and eligibility of each applicant. The loan can be a term loan or an overdraft.
- Loans up to Rs.2 Lakh – 100% of the amount is provided.
- Loans between Rs.2 Lakh and Rs.5 Lakh – Borrowers must contribute 20% of the margin.
- Loans above Rs.5 Lakh – Borrowers must contribute 25% of the margin.
Mahila Udyami Scheme Eligibility for Application
- Women entrepreneurs or individuals who run a micro MSME-registered business.
- Businesses with women entrepreneurs who hold a minimum of 50% ownership.
- Women belonging to the ST/SC category and those with BPL cards will receive priority.
- Women entrepreneurs who have completed training at R-SETIs or other institutions of higher learning will be given preference.
- The applicant should not have been in default with any financial institution or bank.
- Only non-agricultural-based businesses in manufacturing, trading, or service sectors are eligible.
- Women or groups of women who receive loans from micro-finance organizations are also eligible.
- This scheme also offers loans to Self-Help Groups and Joint Liability Groups.
- No collateral is needed.
Mahila Udyami Loans Repayment Schedule
The repayment period for term loans can range from three to five years. There is also a maximum moratorium of three to six months. Overdraft limits are sanctioned by the bank for three years, with a review every year.
Conclusion
MUDRA Loans for Women serve as a crucial financial tool for empowering female entrepreneurs across various industries. By offering accessible funding, flexible repayment terms, and subsidized interest rates, these loans enable women to establish, expand, and sustain their businesses with ease. The Pradhan Mantri MUDRA Yojana (PMMY) and Mahila Udyami Scheme further enhance opportunities for women-led enterprises, promoting financial independence and economic growth. With simplified application processes and government-backed support, MUDRA Loans are helping to bridge the gender gap in entrepreneurship and drive India’s progress toward an inclusive and self-reliant economy.
