Understanding Mudra Loan Options for Women

The mudra loan scheme for women was launched in 2015 by the government of India. Since then, it has significantly transformed the Indian business ecosystem and has been a great boon for women entrepreneurs. The Mudra Yojana scheme for women not only prioritises gender parity and financial inclusion for women, but it also challenges the conventional business norms by providing financial aid to women and empowering them to be a business owner and an important contributor to the nation's socio-economic development.

 

What is a Mudra loan for women?

 

Mudra loan for women is an integral part of the government's PMMY (Prime Minister Mudra Yojana) initiative, which aims to provide financial assistance to micro, small, and medium-sized enterprises (MSMEs). This scheme fuels the business aspirations of women in India by providing them with the necessary capital to make their dream of being business owner

s come true.

 

 

Types of mudra loan scheme for women

 

The government of India has authorised certain banks, NBFCs (non-banking financial companies), and MFIs (Micro Finance Institutions) to extend the Mudra Loan scheme for women entrepreneurs. These loans are offered in three distinct categories.

 

• Shishu

  This Mudra Yojana for women scheme is specifically meant to offer financial support to small and micro business owners who want to set up their own enterprise or to women entrepreneurs who are in the early stages of business set-up and need funds to grow or expand their business. Under this scheme, women entrepreneurs can get a maximum loan amount of Rs. 50,000.

   

• Kishor

  Under Kishor loans, the government of India offers loans to businesses that want to expand their operations further but lack capital. They offer loans ranging from ₹50,000 to ₹Lakh to help women small business owners scale up their operations, purchase new machinery, increase working capital, etc., and take their business to the next level.

   

   

• Tarun

  The Tarun Mudra loan scheme for women caters to the financial needs of women entrepreneurs with well-established enterprises who need a substantial loan ranging from ₹5 Lakh to ₹10 Lakh. It facilitates further expansion, business development and diversification.

   

  The Tarun Mudra loan scheme for women caters to the financial needs of women entrepreneurs with well-established enterprises who need a substantial loan ranging from ₹5 Lakh to ₹10 Lakh. It facilitates further expansion, business development and diversification.

 

Mudra loan for women interest rate

 

Under the PMMY (Pradhan Mantri Mudra Yojana) scheme, you can avail of a loan for your business at competitive interest. Although the interest rate may vary based on the type of mudra loan scheme, it usually ranges between 8% to 12% per annum.

 

These affordable interest rates ensure that you, as a woman business owner, have access to funds without feeling the burden of repayment and can support your business endeavour.

 

 

Mudra loan for women's loan repayment tenure

 

The repayment tenure for mudra loans for women is quite flexible, and you can align it with your business's financial needs and cash flow. But, depending on the type of mudra loan scheme you get, the repayment tenure ranges from 3 to 5 years.

 

Some lenders also offer customised repayment options to suit your exact business needs and financial condition; you can choose from monthly, quarterly, or yearly payments. This flexibility allows you to repay the amount without feeling any burden or compromising on your business' growth plans.

 

Eligibility criteria for Mudra Loan scheme for women

 

Mudra loan for women eligibility is simple and inclusive, which encourages all aspiring female owners to take their first towards entrepreneurship and get the funds they need to get their business up and running and prosper further.

 

• Citizenship

  You must be a resident Indian citizen to be eligible for a Mudra loan for women.

   

• Age

  The Mudra Loan for Women scheme is available for women entrepreneurs of all ages; however, to qualify for the loan, you must be at least 18 years old at the time of application.

   

• Business type

  As a woman business owner, if your business enterprise falls under one of these sectors—trading, services, or manufacturing—you can apply for a Mudra loan.

   

• Loan category

  There are three types of Mudra loans for women: Shishu, Kishor, and Tarun. Your eligibility will vary depending on the type of Mudra loan you want to take out. Also, the maximum amount you can borrow will depend on the loan category.

   

  Also Read: MUDRA Loan Eligibility - Beginner's Guide

   

   

• Business plan

  Whether you want to start a new business or you are seeking funds for an existing set-up, you must have a well-crafted business plan that showcases how you will be using the funds, your business's future plans, and your financial prospects to secure the loan under the Mudra Yojana scheme for women.

   

  Necessary documents when applying for mudra loan for women

   

  If you want to apply for a Mudra loan in India, you must submit specific documents, including -

   

  • Identity Proof - Voter ID, valid passport, government-issued ID, Aadhaar card (you can submit any one of these documents)
  • Address Proof - Utility bills, rent agreement, Aadhaar card, valid passport (you can submit any one of these documents)
  • Business plan - A detailed business plan that outlines the nature of the business, project cost, revenue projection, etc.
  • Quotations - If you are planning to purchase new machinery, inventory or raw materials for your business, you must attach a copy of the quotation received
  • Bank statement - Copy of bank account state for at least six months showcasing business income credit
  • Caste certificate - If you apply for the mudra loan for women under a specific/special category, you must provide a caste certificate
  • Ownership proof - Documents that confirm that you are the local owner of the business premises.

 

*Please note - The list of documents mentioned above is only indicative, the actual documents required for mudra loan for women may vary from one lender to another; you may be required to provide additional documents.

 

Conclusion

 

If you are looking for business loan options apart from the government schemes, consider approaching Udyog Plus, a part of Aditya Birla Finance Limited and secure a loan of up to ₹10 Lakh with minimal documents and attractive interest rates.