Bank of India Mudra Loan

Last Updated : Nov. 18, 2024, 1:18 p.m.

The Bank of India Mudra Loan is part of the Pradhan Mantri Mudra Yojana (PMMY) and aims to help micro-entrepreneurs and small businesses across various industries. This loan offers up to ₹10 lakhs to help small businesses grow and sustain themselves. It's tailored to meet the unique needs of businesses in manufacturing, trading, processing, and certain agricultural sectors. This makes it a vital tool for economic development and supports entrepreneurs in achieving success.

What is a Mudra Loan?

A MUDRA Loan is a financial product offered under the Pradhan Mantri MUDRA Yojana (PMMY), launched by the Government of India to support small and micro enterprises. MUDRA loans are categorized into three types—Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakhs), and Tarun (₹5 lakhs to ₹10 lakh)—based on the stage of business growth. The goal is to promote entrepreneurship and boost financial inclusion by offering accessible credit.

Bank of India Mudra Loan Key Highlights

Purpose of Mudra Loan By Bank of India

Mudra loans are provided for various purposes that help generate income and create jobs. These loans are mainly used for:

• Business Loans: For vendors, traders, shopkeepers, and other service-based activities.
• Working Capital Loans: Through Mudra Cards to manage daily business expenses.
• Equipment Financing: For purchasing necessary machinery and equipment for small businesses.
• Transport Vehicle Loans: For buying vehicles used exclusively for business purposes.
• Agri-Allied Non-Farm Activities: Such as fish farming, beekeeping, and poultry farming.
• Commercial Vehicles: For purchasing tractors, tillers, and two-wheelers used in business operations.

Bank of India Mudra Loan Interest Rates

As determined by the bank for Micro accounts and activities related to agriculture, subject to periodic updates.

Bank of India Mudra Loan Processing Fees

Bank of India has not shared the processing fees and charges for Mudra loans. Applicants can visit a branch to get more information.

Features of Bank of India Mudra Loan

Here are the main features of the Mudra loan provided by the Bank of India:

Loan Amount

The Bank of India provides MUDRA loans up to ₹10 lakhs. As per the Budget 2024 proposal, the limit may increase to ₹20 lakhs for entrepreneurs who have successfully repaid previous loans in the ‘Tarun’ category.

Purpose

Eligible micro-entrepreneurs can access MUDRA loans to establish new enterprises or enhance existing micro-businesses in manufacturing, trading, processing, and the service sector. Additionally, these loans support activities related to specific agriculture sectors.

Security Requirements

• The financed asset itself acts as the primary security.
• Personal guarantees from directors or promoters are required.
• No collateral is necessary.

Margin Requirements

• For loans up to ₹50,000, no margin is required.
• For loans exceeding ₹50,000, a 15% margin is applied.

Bank of India Mudra Loan Eligibility Criteria

MUDRA Loan is available to the following groups:

• Women
• Sole proprietors
• Partnership firms
• Private limited companies, and other entities

Documents Required for Bank of India Mudra Loan

Bank of India has not listed the specific documents required to apply for a MUDRA loan. Prospective borrowers can find out more by visiting a Bank of India branch or by giving a missed call to 8010968334. Additionally, applicants can text ‘SME’ to 7669021290 for further information.

But we have provided a general list of documents that are required to apply for a Mudra loan:

Documentation Required for Availing Loan Under Shishu Category

To apply for a loan under the Shishu category, you need to provide the following documents:

Proof of Identity

A self-attested copy of any one of these:

• Driving License
• PAN Card
• Voter’s ID Card
• Aadhaar Card
• Passport
• Photo ID issued by a government authority

Proof of Residence

A self-attested copy of any one of these (not older than 2 months):

• Latest telephone bill
• Property tax receipt
• Voter’s ID Card
• Electricity bill
• Aadhaar Card
• Domicile Certificate
• Passbook or latest bank statement of the proprietor or partners (attested by bank officials)
• Passport
• Certificate from government authorities, local panchayat, or municipality.

Recent Photographs

Two recent passport-sized photographs of the applicant that have been shot within the last six months.

Quotation for Machinery or Items

• A quotation or estimate for the machinery or items you plan to purchase.
• Include the supplier's name, price, and details of the machinery or items.

Proof of Business Identity and Address
Copies of registration certificates, licenses, or other documents that show ownership, address, and identity of your business (if available).

Category Certificate (if applicable)

Proof if you belong to categories like SC (Scheduled Caste), ST (Scheduled Tribe), OBC (Other Backward Classes), or Minority communities.

Documentation Required for Availing Loan Under Kishor and Tarun Categories

To apply for a loan under the Kishor and Tarun categories, you need to provide the following documents:

Proof of Identity
A self-certified copy of any one of these:

• Voter’s ID Card
• PAN Card
• Aadhaar Card
• Driving License
• Passport

Proof of Residence
A self-attested copy of any one of these (not older than 2 months):

• Latest telephone bill
• Property tax receipt
• Voter’s ID Card
• Electricity bill
• Aadhaar Card
• Passport of the proprietor, partners, or directors

Category Certificate (if applicable)
Proof if you belong to categories like SC, ST, OBC, or Minority communities.

Proof of Business Identity and Address
Copies of registration certificates, licenses, or other documents that show the identity, ownership, and address of your business unit.

Bank Account Statement :
Statements from your existing bank account for the last 6 months (if you have one).

Financial Statements
For loans of ₹2 lakhs and above:

Balance sheets of your business for the last 2 years, along with income tax or sales tax returns.

Projected balance sheets for:

1 year if applying for working capital limits.
The entire loan period is applying for a term loan.

Current Sales Details
Information about sales made during the current financial year up to the date of your application.

Project Report
A detailed report on your proposed project, including its economic and technical feasibility.

Business Formation Documents
Copies of the Partnership Deed, or Memorandum and Articles of Association if your business is a partnership or company.

Asset and Liability Statement
If there's no third-party guarantee, you might need to provide a statement of your assets and liabilities, including those of directors or partners, to assess your net worth.

Photographs
Two passport-sized photos of the proprietor, partners, or directors.

Steps to Apply for Bank of India Mudra Loan

To apply for a Bank of India Mudra Loan, interested parties can take advantage of the convenient online process. Simply search for the " Bank of India Mudra loan apply online " section on their official website, where you can fill out and submit your application directly from the comfort of your home or office.

Summing Up!

The Bank of India Mudra Loan is a pivotal tool for fostering small business growth and financial independence. With its flexible loan options, such as term loans and working capital, and the possibility of increased limits for compliant borrowers, it offers a support system for budding and existing entrepreneurs. By removing barriers such as collateral requirements and providing tailored loan products, the Bank of India ensures that small businesses can thrive and contribute effectively to the nation's economy.