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SBI Mudra Loan: Small and medium-sized enterprises (SMEs) are the backbone of the Indian economy, contributing significantly to its growth and development. However, starting and running a small business requires capital, which is often difficult for entrepreneurs to obtain. In such a scenario, SBI Mudra Loan comes as a blessing for small business owners. In this article, we will discuss everything you need to know about SBI Mudra Loan.

What is SBI Mudra Loan?

SBI Mudra Loan is a loan scheme initiated by the Government of India to provide financial assistance to micro, small, and medium-sized enterprises (MSMEs) in the country. The scheme was launched under the Pradhan Mantri Mudra Yojana (PMMY) in April 2015 to support entrepreneurship and promote small businesses in the country. State Bank of India (SBI), being the largest public sector bank in India, is one of the leading lenders for the Mudra loan scheme. The loan can be used to start or expand a small business, and it is available for up to Rs. 1 lakh.

Types of SBI Mudra Loan:

SBI Mudra Loan is divided into three categories based on the funding requirements of the MSMEs. They are:

1. Shishu: This category is for loans up to Rs. 50,000. It is ideal for entrepreneurs who are just starting out or who need a small amount of capital to grow their business.
2. Kishore: This category is for loans between Rs. 50,001 and Rs. 500,000. It is suitable for entrepreneurs who are looking to expand their business or who need to purchase equipment or inventory.
3. Tarun: This category is for loans between Rs. 500,001 and Rs. 10 lakh. It is ideal for entrepreneurs who are looking to scale their business or who need to invest in a major project.

Eligibility Criteria

To be eligible for an SBI Mudra Loan, you must meet the following criteria:

1. The borrower must be a citizen of India and must have a valid ID proof.
2. The borrower must be an MSME engaged in manufacturing, trading, or service activities.
3. The borrower’s business must be in operation for at least 6 months.
4. The borrower must have a good credit score and repayment history.
5. You must be a micro entrepreneur.
6. You must be an existing current or savings account holder of SBI.
7. Your account(s) must be at least six months old at the time of loan application.
8. Your business must be located in India.

Loan Amount and Interest Rates

The maximum loan amount under the SBI Mudra Loan scheme is Rs. 1 lakh. The interest rate on the loan is fixed at 8.50% per annum.

Repayment Tenure

The repayment tenure for the SBI Mudra Loan is up to 5 years.

How to Apply for an SBI Mudra Loan

You can apply for an SBI Mudra Loan online or at any SBI branch. To apply online, you will need to create a profile on the SBI Mudra Loan website and submit your application. To apply at a branch, you will need to submit a hard copy of your application form and supporting documents.

Documents Required

The following documents are required to apply for an SBI Mudra Loan:

1. Identity Proof: Aadhaar Card, Passport, Voter ID, PAN Card, Driving License, etc.
2. Address Proof: Aadhaar Card, Passport, Voter ID, Utility Bill, etc.
3. Business Registration Certificate: MSME registration certificate, GST registration certificate, Trade license, etc.
4. Proof of Business Continuity: Bank statement, ITR filing, Sales tax returns, etc.
5. Financial Documents: Balance Sheet, Profit and Loss Statement, Cash Flow Statement, etc.
6. Proof of income (such as salary slips or business invoices)

Benefits of an SBI Mudra Loan

There are several benefits to taking out an SBI Mudra Loan, including:

• The loan is backed by the government, so it is a relatively safe option.
• Low Interest Rates: SBI Mudra Loan offers competitive interest rates to MSMEs, starting from 7.45% p.a. The interest rate is determined based on the loan amount, repayment tenure, and other factors.
• The interest rate on the loan is fixed, so you know exactly what your monthly payments will be.
• No Collateral Required: SBI Mudra Loan is an unsecured loan, which means that MSMEs do not need to provide any collateral or security for the loan.
• Flexible Repayment Tenure: SBI Mudra Loan offers flexible repayment tenure ranging from 12 months to 60 months, depending on the loan amount and repayment capacity of the borrower.
• Quick Disbursal: SBI Mudra Loan is processed quickly, and the loan amount is disbursed to the borrower’s account within a few days of approval.
• Easy Application Process: MSMEs can apply for SBI Mudra Loan through online and offline modes. The application process is simple, and the documentation required is minimal.
• The loan can be used to start or expand a small business, which can help you to generate income and create jobs.

Conclusion

The SBI Mudra Loan is a great option for micro entrepreneurs in India who are looking for financial assistance to start or expand their businesses. The loan is easy to apply for and has a number of benefits, including a fixed interest rate and a long repayment tenure. If you are a micro entrepreneur, I encourage you to consider applying for an SBI Mudra Loan.

How to take SBI Mudra Loan?

If you are a micro, small, or medium-sized enterprise (MSME) looking to take SBI Mudra Loan, you can follow these steps:

Step 1: Check Eligibility The first step is to check whether you meet the eligibility criteria for SBI Mudra Loan. Ensure that your business is registered, and you have all the necessary documents in place. Check the loan amount you need and choose the loan category – Shishu, Kishore, or Tarun.

Step 2: Choose the Lender SBI is one of the leading lenders for Mudra loans, and you can choose SBI as your lender. Visit the SBI website or branch office to know more about the loan scheme and its features.

Step 3: Fill the Application Form You can apply for SBI Mudra Loan through online or offline modes. Download the application form from the SBI website or visit the nearest branch office to collect the form. Fill the application form carefully, providing all the necessary details about yourself and your business.

Step 4: Attach Documents Attach all the necessary documents required for SBI Mudra Loan. The documents include identity proof, address proof, business registration certificate, proof of business continuity, financial documents, and other relevant documents.

Step 5: Submit the Application Once you have filled the application form and attached the documents, submit the application form to the nearest SBI branch office. Ensure that you have included all the necessary documents and signed the application form.

Step 6: Wait for Approval After submitting the application form, wait for the bank to process your application. SBI usually takes a few days to process the loan application and approve the loan.

Step 7: Receive Disbursal If your loan application is approved, the loan amount will be disbursed to your bank account within a few days. Ensure that you use the loan amount judiciously and repay the loan on time to avoid any penalties.

How to apply for SBI Mudra Loan online?

If you are looking to apply for SBI Mudra Loan online, you can follow these simple steps:

• Step 1: Visit the SBI website Visit the official website of State Bank of India at www.sbi.co.in.
• Step 2: Go to the SBI Mudra Loan Page Click on the “Loans” tab and select “Mudra Loan” from the dropdown menu. Then, click on the “Apply Online” button.
• Step 3: Select the Loan Category Choose the loan category – Shishu, Kishore, or Tarun, depending on the loan amount you need and the nature of your business.
• Step 4: Fill the Application Form Fill the online application form with your personal and business details carefully. Make sure you provide accurate information, as incorrect information may lead to rejection of the application.
• Step 5: Upload Documents Upload all the necessary documents required for SBI Mudra Loan. The documents include identity proof, address proof, business registration certificate, proof of business continuity, financial documents, and other relevant documents.
• Step 6: Review and Submit Review the application form and documents carefully before submitting them. Once you are satisfied with the details provided, click on the “Submit” button to complete the application process.
• Step 7: Wait for Approval After submitting the application form, the bank will review your application and verify the documents provided. SBI usually takes a few days to process the loan application and approve the loan.
• Step 8: Receive Disbursal If your loan application is approved, the loan amount will be disbursed to your bank account within a few days. Ensure that you use the loan amount judiciously and repay the loan on time to avoid any penalties.

How to apply for SBI Mudra Loan Offline?

If you prefer to apply for SBI Mudra Loan offline, you can follow these steps:

• Step 1: Visit the SBI Branch Office Visit the nearest SBI branch office to collect the loan application form. You can also download the form from the SBI website and take a printout.
• Step 2: Fill the Application Form Fill the application form with your personal and business details carefully. Ensure that you provide accurate information, as incorrect information may lead to rejection of the application.
• Step 3: Attach Documents Attach all the necessary documents required for SBI Mudra Loan. The documents include identity proof, address proof, business registration certificate, proof of business continuity, financial documents, and other relevant documents.
• Step 4: Submit the Application Once you have filled the application form and attached the documents, submit the application form to the nearest SBI branch office. Ensure that you have included all the necessary documents and signed the application form.
• Step 5: Wait for Approval After submitting the application form, the bank will review your application and verify the documents provided. SBI usually takes a few days to process the loan application and approve the loan.
• Step 6: Receive Disbursal If your loan application is approved, the loan amount will be disbursed to your bank account within a few days. Ensure that you use the loan amount judiciously and repay the loan on time to avoid any penalties.

Comparison between SBI Mudra Loan and Other Bank/Lenders Mudra Loan.

Mudra Loan is a government-backed loan scheme aimed at providing financial assistance to micro and small enterprises engaged in non-farm income-generating activities, such as manufacturing, trading, and service sectors. SBI is one of the major banks that offer Mudra Loans to eligible borrowers. Here’s a comparison of SBI Mudra Loan with other bank/lenders’ Mudra Loan:

1. Interest Rates SBI Mudra Loan interest rates range from 8.75% to 12.45% per annum. Other banks/lenders may offer different interest rates, which may be higher or lower than SBI.
2. Loan Amount SBI Mudra Loan offers loans under three categories – Shishu, Kishore, and Tarun, with a maximum loan amount of Rs. 10 lakhs, Rs. 50 lakhs, and Rs. 1 crore, respectively. Other banks/lenders may offer different loan amounts based on the borrower’s eligibility and other factors.
3. Repayment Period The repayment period for SBI Mudra Loan varies from 3 to 5 years, depending on the loan amount and the nature of the business. Other banks/lenders may offer different repayment periods, which may be shorter or longer than SBI.
4. Processing Time The processing time for SBI Mudra Loan usually takes a few days to a week, depending on the loan amount and the verification process. Other banks/lenders may offer different processing times, which may be faster or slower than SBI.
5. Eligibility Criteria The eligibility criteria for SBI Mudra Loan include age, credit score, business turnover, and other factors. Other banks/lenders may have different eligibility criteria, which may be more or less stringent than SBI.

About Mudra Loan Scheme: Origin & History

The Mudra Loan Scheme is a government-backed loan scheme introduced by the Government of India in 2015. It stands for Micro Units Development and Refinance Agency, and it aims to provide financial support to micro and small enterprises engaged in non-farm income-generating activities, such as manufacturing, trading, and service sectors.

The idea behind the Mudra Loan Scheme is to provide financial assistance to those small entrepreneurs who lack adequate collateral and credit history to secure a loan from banks and other financial institutions. The scheme aims to empower these micro-enterprises and provide them with the necessary financial support to grow and expand their business.

The Mudra Loan Scheme was announced by the Prime Minister of India, Narendra Modi, on 8th April 2015 as a part of the Pradhan Mantri MUDRA Yojana (PMMY). The scheme was launched by the Ministry of Finance, Government of India, with the objective of providing loans up to Rs. 10 lakhs to small entrepreneurs, with a focus on women and marginalized sections of the society.

Under the Mudra Loan Scheme, loans are offered under three categories – Shishu, Kishore, and Tarun, based on the stage of the business and the loan amount required. The loans are provided through various financial institutions, including public and private sector banks, NBFCs, and MFIs, which are authorized by the Mudra Loan Scheme.

Since its inception, the Mudra Loan Scheme has become one of the most popular loan schemes in India, with over 6.88 crore loans disbursed as of March 2021. The scheme has provided financial support to millions of micro and small enterprises and has played a significant role in promoting entrepreneurship and job creation in the country.

FAQs related to SBI Mudra Loan

Here are some frequently asked questions (FAQs) related to SBI Mudra Loan:

Conclusion

SBI Mudra Loan is a great financing option for MSMEs with competitive interest rates, flexible repayment tenure, and quick disbursal. Follow the simple steps mentioned above to apply for SBI Mudra Loan, and make sure to meet the eligibility criteria and provide necessary documents to increase the chances of approval. Applying for SBI Mudra Loan online or offline is also a hassle-free process, but accuracy in information and document submission is necessary to maximize approval chances. While SBI Mudra Loan is a major player, it’s best to compare different lenders’ interest rates, loan amounts, repayment periods, and eligibility criteria to find the most suitable Mudra Loan for business needs.