The Shishu category under the MUDRA (Micro Units Development and Refinance Agency) Loan scheme is specifically designed to cater to micro-businesses and entrepreneurs who require a small amount of financial assistance to kickstart their ventures. This scheme offers loans of up to Rs. 50,000 without the requirement for collateral, making it accessible to a wide range of aspiring entrepreneurs, especially those from marginalised or economically disadvantaged backgrounds.
Here are key features and details about the Shishu Mudra Loan:
- Loan amount: Shishu Mudra Loans are meant for borrowers who need a modest amount of funds to start or expand their micro-enterprises. The loan amount under the Shishu category can go up to Rs. 50,000.
- Eligibility criteria: The eligibility criteria for Shishu Mudra Loans are generally relaxed, targeting small and new businesses. Individuals, small entrepreneurs, and micro-businesses in need of financial support to start or grow their ventures can apply.
- Application process: The application process for Shishu Mudra Loans is designed to be simple and accessible. Entrepreneurs can approach participating banks, financial institutions, and microfinance institutions to apply for these loans.
- Interest rates: The interest rates for Shishu Mudra Loans are usually reasonable and affordable. These rates may vary among different lending institutions, and they are often determined based on the guidelines set by the Mudra scheme.
- Repayment period: The repayment period for Shishu Mudra Loans is typically flexible. It allows borrowers to repay the loan amount over a reasonable duration, ensuring that the repayment terms are manageable for small businesses.
Documents & eligibility required for Shishu Mudra Loan
Documents and eligibility criteria for the Shishu Mudra Loan scheme vary slightly depending on the lending institution, but typically include:
Eligibility:
- Must be an Indian citizen.
- Age requirement varies but is usually between 18 to 65 years.
- Must be engaged in a viable business activity such as manufacturing, trading, services, or agriculture.
- The business should fall under the micro-enterprise category.
Documents:
- Identity proof (Aadhar card, PAN card, passport, voter ID, etc.).
- Address proof (Aadhar card, utility bills, rent agreement, etc.).
- Proof of business ownership or existence (trade license, GST registration, etc.).
- Business plan or project report detailing the purpose of the loan and its expected outcomes.
- Bank account statements for the past six months.
- Income tax returns or financial statements for self-employed individuals.
- Any other documents as required by the lending institution.
Purpose of the Shishu Mudra loan
Shishu Mudra Loans can be utilised for various purposes related to the establishment or growth of micro-enterprises. This may include working capital requirements, purchasing of equipment or machinery, inventory maintenance, or other business-related needs.
The Mudra scheme, including the Shishu category, is backed by the Government of India. It reflects the government's commitment to fostering entrepreneurship, supporting small businesses, and promoting economic growth at the grassroots level.
Role of Mudra
MUDRA does not directly disburse loans to entrepreneurs. Instead, it acts as a refinancing agency, providing financial support to banks and financial institutions that, in turn, offer loans to micro-businesses and entrepreneurs.
The Shishu Mudra Loan, as part of the Mudra scheme, stands as a beacon of support for aspiring entrepreneurs and micro-businesses in India. Tailored for those in the early stages of their ventures, this initiative embodies the government's commitment to fostering economic growth at the grassroots level. By providing accessible and affordable financial assistance, the Shishu Mudra Loan empowers individuals to turn their business dreams into reality. Its simplicity in application, reasonable interest rates, and flexible repayment terms make it a valuable tool in promoting entrepreneurship and contributing to the inclusive development of the nation's economy.
Disclaimer: We have discontinued this product (Mudra loan) at this time. Please contact us on +91-8698010101 to know more about the current financial services provided by us.
