SBI Mudra Loan
Last Updated : Nov. 26, 2024, 5:53 p.m.
SBI provides business loans of up to Rs 10 lakh, with a potential increase to Rs 20 lakh as outlined in the 2024 Budget, through the PM MUDRA Yojana (PMMY) scheme, which is valid for a tenure of up to 7 years. The PM MUDRA Yojana, initiated by the Government of India, supports the development and refinancing of micro and small enterprises.
Enterprises in the manufacturing, trading, and service sectors, as well as those involved in agricultural activities, can utilize the funds from SBI's PMMY loan for purposes such as capacity expansion and modernization. In this article, we will learn more about SBI Bank mudra loan and how it helps businesses in expansion.
SBI Mudra Loan Key Highlights
Nature of Facility | Term loan and working capital |
Purpose | For modernization, providing business capital, and facilitating expansion |
Target Group | Traders, business enterprise members, and individuals engaged in agricultural activities |
Quantum of Loan | Maximum loan amount: ₹10 lakh - Up to ₹50,000 for Shishu loans - ₹50,001 to ₹500,000 for Kishore loans - ₹500,001 to ₹10,00,000 for Tarun loans |
Repayment Period | Between 3 to 5 years |
Processing Fee | - None for Shishu and Kishore loans - 0.5% of the loan amount for Tarun loans |
Margin | - None for loans up to ₹50,000 - 20% for loans from ₹50,001 to ₹10 lakh |
Interest Rates | Linked to the MCLR (Marginal Cost of Funds based Lending Rate) |
Collateral Security | No collateral required. Primary security involves hypothecation of property and machinery for term loans and stocks and receivables for working capital. |
Why Should You Apply for SBI Pradhan Mantri Mudra Yojana?
The Pradhan Mantri Mudra Yojana (PMMY)offers a great opportunity for small business owners who need financial support. Here are some key reasons to apply:
- The SBI PMMY scheme provides microenterprises across India with improved access to necessary funding.
- Loans under this scheme come with reasonable interest rates, making it easier for business owners to manage their finances.
- By supporting small businesses, the PMMY helps in creating jobs and boosting the overall GDP.
- There are minimal to no processing fees for loans under this scheme. The Shishu and Kishore categories do not have any processing fees, whereas the Tarun category carries a nominal fee of 0.50% plus applicable taxes.
SBI Bank Mudra Loan Categories and Amounts
SBI divides its MUDRA loans into three types based on the amount of the loan, designed to support different stages of business development.
Categories | Loan Amount |
|---|---|
Shishu | Loans up to Rs. 50,000 for businesses in the initial stage |
Kishore | Loans from Rs. 50,001 to Rs. 5 lakh for businesses looking to expand |
Tarun | Loans ranging from Rs. 5 lakh to Rs. 10 lakh are available for well-established businesses that are looking to expand further. |
Shishu: This category offers loans up to ₹50,000 and is specifically designed for businesses at their inception. It's ideal for entrepreneurs who are just beginning their business journey and need initial capital to cover startup expenses such as purchasing inventory, setting up a workspace, or other early-stage operational costs. This financial support aims to help new businesses lay a strong foundation without the stress of heavy financial burdens.
Kishore: Catering to businesses that are past the initial phase and looking to grow, the Kishore loans provide financial assistance ranging from ₹50,001 to ₹5 lakh. This loan is suitable for small enterprises that need funds to expand their market reach, increase production capacity, enhance their marketing efforts, or upgrade their equipment. It supports businesses in their development stage to scale operations and increase profitability.
Tarun: For well-established businesses aiming for significant expansion, Tarun loans offer financial support ranging from ₹5 lakh to ₹10 lakh. This loan category is targeted at enterprises that have already proven their market presence and are looking to invest in substantial growth activities such as diversification into new markets, large-scale production increases, or major infrastructural enhancements.
SBI Bank Mudra Loan Interest Rates
- The interest rates are tied to SBI's MCLR (marginal cost of funds-based lending rate) and vary according to the borrower's credit rating, ensuring fair and competitive pricing.
SBI Mudra Loan Margin Requirements
SBI MUDRA loans come with specific terms designed to fit the financial capabilities of different business sizes. The terms include margins and competitive interest rates tailored to the loan amount:
- For loans up to Rs. 50,000, there is no margin required.
- For loans from Rs. 50,001 to Rs. 10 lakh, the margin is set at 20%.
- The interest rates are competitive, linked to the External Benchmark Lending Rate (EBLR).
SBI Mudra Loan Repayment Period
The repayment terms for MUDRA loans vary based on the loan amount, providing flexibility in financial planning for businesses:
- Loans below Rs. 5 lakh can be repaid within a maximum of 5 years, including a moratorium period of up to 6 months.
- Loans ranging from Rs. 5 lakh to Rs. 10 lakh come with a maximum repayment period of 7 years, including a moratorium period of up to 12 months.
Processing Fees of SBI Bank Mudra Loan
To further support micro and small enterprises, SBI offers structured processing fees based on the loan category, ensuring affordability:
- No processing fee for Shishu and Kishore categories for MSE units.
- For the Tarun category, a fee of 0.50% of the loan amount plus applicable taxes is charged.
SBI E Mudra Loan
In addition to the traditional MUDRA loans, SBI offers the e-Mudra loan which provides quicker access to funds up to Rs. 1 lakh with a repayment tenure of up to 5 years. For instant loans up to Rs. 50,000, the application process is entirely online. For amounts greater than Rs. 50,000, applicants are required to visit an SBI branch.
SBI e-Mudra Loan Application Process
Prospective borrowers can apply online for MUDRA loans at the bank-specific URL: SBI MUDRA Loan Apply Online . For e-Mudra loans, borrowers can apply directly through SBI's portal if they meet the bank’s eligibility criteria.
Here are the steps you need to follow to apply for an SBI e-Mudra loan:
- Start by visiting the SBI e-Mudra portal.
- On the homepage, click the 'Apply Now' button.
- Carefully read the instructions available in Hindi or English, and then click 'Ok' to move to the following page.
- Enter your mobile number, your SBI savings or current account number, and the amount of loan you wish to apply for.
- Click on 'Proceed'.
- Complete the online application form. Select the appropriate options from the dropdown menus as needed.
- Upload all required documentation.
- Agree to the SBI e-Mudra Terms and Conditions and proceed to electronically sign the document by following these steps:
- Enter your Aadhaar number.
- Check the consent box to authorize the use of your Aadhaar for e-Sign purposes.
- An OTP will be sent to the phone number associated with your Aadhaar.
- Enter the received OTP in the designated field to finalize your application.
SBI Bank Mudra Loan Eligibility
Both existing and new business units are eligible to apply for MUDRA loans. The loans are guaranteed by the Credit Guarantee for Micro Units (CGFMU) through the National Credit Guarantee Trustee Company (NCGTC), with a guarantee cover valid for five years.
Documents Required to Apply for Mudra Loan
While SBI has not specified the exact documents for MUDRA loans, typical requirements for e-Mudra loans include:
- Account number and branch details (current or savings)
- Business proof (name, start date, and address)
- Aadhar number linked to the account
- Community details if applicable (General/ST/OBC/SC/Minority)
- GSTN & UDYOG Aadhar
- Business registration documents, if available
Additional Benefits
SBI issues MUDRA RuPay Cards to eligible CC account holders, providing easy access and management of the loan amount.
This simplified guide aims to provide all necessary information regarding SBI's MUDRA and e-MUDRA loans, helping business enterprises leverage these financial aids for their growth and operational needs.
Things to Keep When Applying for an SBI e Mudra Loan
Loans issued under the Pradhan Mantri Mudra Yojana scheme come with a guarantee from the Credit Guarantee for Micro Units (CGFMU) and the National Credit Guarantee Trustee Company (NCGTC).
This guarantee covers a maximum period of five years, setting the maximum repayment term for these loans at 60 months.
Wrapping Up!
This easy-to-follow guide offers all the essential details about SBI's MUDRA and e-MUDRA loans, assisting businesses in using these financial supports for their growth and operational requirements.
Frequently Asked Questions (FAQs)
