The SBI Mudra loan is a financial initiative under the Pradhan Mantri Mudra Yojana (PMMY), which aims to support small and micro enterprises in India. The initiative facilitates the disbursement of loans to eligible businesses and entrepreneurs based on three categories; Shishu, Kishore, and Tarun. These categories represent the different stages of business development, Shishu covers startups, Kishore covers businesses in the growth phase and Tarun is designed for well-established enterprises.
Businesses and enterprises will get different loan amounts for the different categories, as well as different tenures. Here is a table showing the loan amounts for eMudra loan SBI:
| Shishu | Up to ₹50,000 |
| Kishore | ₹50,001 – ₹5 lakhs |
| Tarun | ₹5 lakhs – ₹10 lakhs |
Eligibility Criteria for SBI Mudra Loans
The State Bank of India offers Mudra loans to all existing and new enterprises that meet the eligibility criteria for the loan. These criteria are:
- The new and existing enterprises should be having business in manufacturing, trading, service and agricultural activities sectors.
- They should have an existing current account or savings account for a minimum of 6 months with SBI.
Comparing SBI Mudra Loan Interest Rates with Banks and NBFCs
The SBI Mudra loan interest rates offered are in accordance with the MCLR rate or the Marginal cost of fund-based lending rate. Understanding the different lending rates of other lenders can help you make a better decision when choosing the right lender for you. Below is a comparison between the interest rates of different banks and NBFCs:
| Lenders | Interest Rate |
|---|---|
| State Bank of India | Linked to MCLR |
| Union Bank of India | 10.55% p.a. onwards |
| PSB Loans in 59 Minutes | 8.50% p.a. onwards |
| Ziploan | 8.00% p.a. onwards |
| City Union Bank | 12.00% p.a. onwards |
| Punjab National Bank | 9.15% p.a. onwards |
| Flexiloan | 12.00% p.a. onwards |
| Bajaj Finserv | 8.60% p.a. onwards |
| Bank of Maharashtra | 9.30% p.a. onwards |
| Saraswat Bank | 11.65% p.a. onwards |
| Tamilnad Mercantile Bank | 9.45% p.a. onwards |
Note: These rates are indicative and subject to change. Always check with the bank for the most up-to-date information before making any investment decisions.
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Benefits of SBI Mudra Financing
SBI eMudra loan offers many benefits for businesses to take advantage of and grow their business. These benefits aim to promote financial inclusion, empower small business owners and stimulate economic development at the grassroot level. These benefits are as follows:
- Higher loan amount: Financial assistance: Starting a business or expanding will require finances. The SBI mudra loan offers financial support to all eligible small and micro enterprises, helping them meet their working capital needs, expand operations and establish new ventures.
- Category based loan: The loan is given to businesses according to the categories they fall under, i.e, Shishu, Kishore or Tarun. This helps to accommodate businesses at different stages of their development with varying loan amounts.
- Flexible loan amounts: The loan offers a maximum amount of 10 lakhs, offering flexibility in loan amounts ranging from small startups to more established businesses.
- Collateral free: The SBI eMudra loans are collateral-free loans, which further eases the burden on entrepreneurs who may not have significant assets to pledge.
- Promotes self employment: The loan encourages entrepreneurship which contributes to job creation and economic growth at the grassroot level.
- Low interest rates: The loan offers competitive interest rates making it affordable for all borrowers.
- Convenient repayment terms: The loan provides flexible repayment terms ranging from 3 – 5 years along with a moratorium period for the loan. This helps to align with the cash flow of small businesses and reduces financial stress.
- Supports diverse sectors: SBI mudra loan covers businesses from various sectors including manufacturing, trading and services. Supporting the growth of various types of micro-enterprises.
- Contributing to economic development: The loan provides financial support to growing businesses, which in empowers small businesses to create job opportunities and foster economic development.
Mudra Loan EMI Calculator
Calculate your EMI with ease for your Mudra Loan with SBI. Just enter the loan amount, interest rate, & tenure to check your EMI. Utilize the Mudra Loan EMI calculator as per your needs.
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Exploring SBI Mudra Loan Repayment Plans
The State Bank of India Mudra loan repayment plan is a crucial aspect of the borrowing process. Understanding the repayment structure is important for entrepreneurs and businesses while applying the SBI eMudra loan online. Here are the repayment plan offered by SBI for Mudra loans:
- The repayment term for loan amounts of up to 5 lakhs is 5 years or 60 months along with a moratorium period of 6 months.
- The repayment term for loan amounts ranging between 5 lakhs to 10 lakhs is 7 years including a maximum moratorium period of 12 months.
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Check out other details on Mudra Loans below:
You can also check other loan schemes offered by SBI using the links provided below:
SBI Mudra Loans vs. Alternative Financing
While the SBI Mudra loan is a great option for businesses looking for financial assistance, it is always good to be aware of other alternative funding options available. Carefully assessing the terms, interest rates and repayment structures offered by different other financing options can help businesses determine the most suitable one for their business needs. Given below are the alternate financing options available for entrepreneurs and businesses:
Government Schemes:
- Prime Minister Employment Generation Programme (PMEGP): This loan offers financial aid through Khadi and Village Industries Commission (KVIC) for setting up or expanding micro-enterprises in the non-farm sectors.
- Stand-Up India Scheme: This scheme focuses on providing loans to women entrepreneurs belonging to the Scheduled Caste, Scheduled Tribe and Other Backward Classes for setting up new greenfield enterprises.
- Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE): The scheme provides credit guarantee to loans given by banks and financial institutions to MSMEs. Helping them get access to affordable financing.
Banks and NBFCs:
- Microfinance Institutions (MFIs): These institutions offer small loans to individuals and groups for income generating activities. They often offer flexible repayment terms and minimal documentation.
- Private Sector Banks: Many private banks also have dedicated MSME lending programs with competitive interest rates and faster loan processing times.
- Non Banking Financial Institutions (NBFCs): Some NBFCs specially cater to the MSME sector and offer a wide range of loan products and services compared to traditional loans.
Other Options:
- Angel Investors and Venture Capitalists: Businesses with high growth potential can look for financial aid through Angel investors and Venture capitalists.
- Crowdfunding Platforms: There are many platforms available that allow businesses to raise capital from a large pool of investors.
SBI Mudra Loan offers government-backed support specifically designed for small businesses, at competitive interest rates and tailored repayment plans. Alternative financing options provide additional flexibility and quicker access to funds but may come with varying interest rates and terms. The choice will depend on the business’s specific needs, eligibility, and preferences.
Application Process for SBI Mudra Loans
The State Bank of India offers both offline and online options to apply for Mudra loans.
- To apply for SBI Mudra loan online, you will need to visit the SBI website, click on ‘Business Loans’, under which you will find Pradhan Mantri Mudra Yojana (PMMY). Fill out the application form, enter all the necessary information and submit it along with all the required documents.
- To apply offline, simply visit an SBI Bank branch, ask for the application form for PMMY loan and fill it with all the necessary details. You can then submit the form along with all the required documents.
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