Readers only offer: Get additional Rs 200 off on 'The Better Home' powerful natural cleaners. Shop Now
COVID-19 Relief Package For MUDRA Loans: What Are They, How It Impacts You

COVID-19 Relief Package For MUDRA Loans: What Are They, How It Impacts You

MUDRA loans are given under three different categories – Shishu (for tiny business units), Kishor (slightly bigger units), Tarun (relatively bigger units)

Ad Banner

With The Positive Collective, The Better India’s COVID-19 coverage is available to regional language publications for free. Write to for more details.

Launched in the year 2015, Micro Units Development and Refinance Agency (MUDRA) is a Non-Banking Finance Company (NBFC) set up by the government to support the micro-enterprise sector.

During the Finance Minister’s announcement of the COVID-19 package, small businesses, amongst the hardest-hit segments, have been given liquidity support through the MUDRA scheme.

What is the Purpose of MUDRA?

  • The intent, while launching this scheme, was to support the small-scale businesses that don’t have access to formal channels of borrowing.
  • According to reports, more than 90 per cent of the non-corporate small business (NCSB) sector does not have access to formal sources of finance.
  • MUDRA provides refinance support to many financial institutions, including public and private sector banks, regional rural banks, state cooperative banks, microfinance institutions, and non-banking finance companies.

Who is Eligible for a Loan under MUDRA?

Source: Pixabay
  • Any entrepreneur running a small business enterprise is eligible to apply for this loan.
  • MUDRA loans are given under three different categories
    – Shishu (for tiny business units) which covers loans upto Rs 50,000,
    – Kishor (slightly bigger units) which covers loans above Rs 50,000 and upto Rs 5 lakh and
    – Tarun (relatively bigger units) which covers loans above Rs 5 lakh and upto Rs 10 lakh.
  • Over and above this, MUDRA also operates a special refinance scheme for women entrepreneurs, called Mahila Uddyami Scheme.

How Can One Apply for a MUDRA Loan?

Applicants need to have the following documents ready – proof of identity (Aadhaar, Voter ID, PAN, Driving License, etc.), address proof (electricity bill, telephone bill, gas bill, water bill, etc.), proof of business (business registration certificate, etc.)
• Applicants need to approach a financial institution to avail this loan.
• Upon filling the application form, and furnishing all details as required, they also have to fill out the amount they need.
• Once these steps have been carried out, the bank or financial institution will sanction the MUDRA loan.

Ad Banner

COVID-19 Impact on MUDRA

• A 2 per cent interest rate subvention for 12 months to prompt loan payees under the Mudra scheme.
• Special loans of up to Rs 10,000 to provide working capital for street vendors to restart businesses.
• This scheme is likely to benefit more than 30 million credit takers.

(Edited by Saiqua Sultan)

Like this story? Or have something to share?
Write to us:
Connect with us on Facebook and Twitter.

Ad Banner

Let’s be friends :)
Sign in to get free benefits
  • Get positive news daily on email
  • Join our community of positive ambassadors
  • Become a part of the positive movement
Before you go...

We have a favor to ask.

Our teams put in a lot of effort to create the content you love at The Better India.

In return, we would love it if you could help us spread the word about our new range of sustainable home cleaners: The Better Home