Mudra (Micro Units Development and Refinance Agency) is an initiative by the Government of India to provide financial support to micro and small enterprises. The Mudra Loan scheme, introduced in April 2015, aims to promote entrepreneurship, especially among first-time entrepreneurs and those from marginalised communities.
The three categories under Mudra Loans are:
- Shishu Loan: This category is for businesses in their initial stages. It provides small amounts of funding to help entrepreneurs kickstart their ventures.
- Kishor Loan: The Kishor category is for businesses that have moved past the initial stages and are looking for additional funds for expansion. This stage caters to enterprises that have demonstrated growth potential and sustainability.
- Tarun Loan: The Tarun category is designed for established businesses that require significant capital for further expansion. It caters to enterprises that have achieved a level of stability and are ready to take on larger projects.
Kishor Mudra Loan
The Kishor category under the Mudra Loan scheme is tailored for enterprises that have surpassed the startup phase and are ready for expansion. This stage recognises the need for increased financial support to enhance operations, diversify products or services, and reach a broader market.
Features of Kishor Mudra Loan
- Loan amount: Kishor Mudra Loans typically provide funding in the range of Rs. 50,000 to Rs. 5 lakh, depending on the financial requirements of the enterprise.
- Purpose: The loan can be utilised for various purposes, including working capital requirements, purchasing machinery or equipment, expanding business premises, and other growth-oriented initiatives.
- Repayment tenure: The repayment tenure for Kishor Mudra Loans is flexible and can extend up to five years, allowing businesses to manage repayments in a manner that aligns with their cash flow.
- Interest rates: Interest rates for Mudra Loans are usually competitive, and they are determined by the lending institutions. The government provides refinancing support to these institutions, helping keep interest rates reasonable.
- Collateral-free: Mudra Loans, including Kishor Mudra Loans, are typically collateral-free. This is advantageous for small business owners who may not have substantial assets to pledge as security.
Application process
The application process for a Kishor Mudra Loan involves approaching participating financial institutions, such as banks or microfinance institutions. The borrower needs to submit the necessary documentation, including business details, financial statements, and the proposed utilisation of funds. The lending institution evaluates the application and, if approved, disburses the loan.
The Kishor Mudra Loan serves as a crucial stepping stone for businesses in the growth phase. By offering substantial funding without the need for collateral, it supports entrepreneurs in expanding their enterprises, creating employment opportunities, and contributing to the overall economic development of the country. As with any financial product, potential borrowers should thoroughly understand the terms, conditions, and responsibilities associated with the loan before proceeding. It is advisable to check for the latest updates and guidelines from official sources, as financial programs and regulations may evolve over time.
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.
