UCO Bank Mudra Loan: Eligibility, Benefits & Apply

As a Small business owner, getting the right amount of funds is often difficult because of the security and security. However, the UCO Bank Mudra Loan provides adequate business development loans, which can help increase Indians’ economic status. This article provides the loan details, like its application process, eligibility, and required documents.

UCO Bank Mudra Loan Overview:

In recent times, small and medium businesses have emerged greatly, but the major thing that stops them is the capital. Most small and medium businesses only need a little funds regardless of the business idea. The government started the UCO Bank Mudra Loan to provide loans for the best business ideas.

MUDRA loan means Micro Units Development and Refinance Agency, a non-banking finance company that provides business loans. With UCO Bank as its prominent leader, they give loans of up to Rs. 10,00,000 to eligible applicants. The interest rate starts from 8.05% and varies based on different factors. This government initiative helps small business owners develop businesses and increase the country’s financial status. 

Types of UCO Bank MUDRA loan:

The UCO bank MUDRA loan is divided into three major categories, and loans are sanctioned for eligible applicants. They are,

Shishu Yojana:

Through Shishu Yojana, small business owners can avail up to Rs.50,000 to start their business. To get this loan, the owners must present their ideas with every detail of the business idea. This loan is specially designed for small businesses to help start the business without any financial burden. 

Kishore Yojana:

This Yojana is for the already established businesses but for expansion. The business owners can get loans between Rs. 50,000 and Rs.5,00,000 to expand their business to another level. To get this loan sanction, the business owners should apply for it by providing the required documents.

Tharun Yojana:

Through this Yojana, full-fledged business owners can get loans to expand their businesses to the highest level. After providing the documents, the eligible candidates can get a loan up to Rs. 10,00,000. 

Features of MUDRA loan from UCO bank:

The government started the UCO bank MUDRA loan to assist small business owners financially. They launched this scheme with the following features. They are,

• The applicant can get loans without collateral, but the perfect business plan is required.
• The repayment period is 1 to 5 years, with a fixed interest rate during the application.
• There are three categories: Sishu Yojana, Kishore Yojana and Tarun Yojana. The three categories have three different ranges of loan amounts.
• There is no need to pay the processing fee on the credit, which reduces the borrowing amount.
• You can get a loan from any nearest UCO bank after submitting the application and becoming eligible.
• Once you receive the MUDRA loan approval, you will get a MUDRA debit card to withdraw the money. 

Eligibility Criteria for MUDRA loan:

There is an eligibility criteria that the business owners must meet to receive benefits from the UCO Bank MUDRA loan. They are,

• The following business categories are eligible:
  • Food production sector
  • Agricultural activities concerns
  • Small business vendors and shopkeepers
  • Textile and fabric industry
  • Small manufacturers
  • Vehicle and machine shops
  • Truck owners
  • Self-proprietors
  • Service sector firms
  • Artisans
• Entities like Private Limited, Proprietary concerns, Partnership concerns, Public limited and other legal entities are eligible.
• There should be no criminal background for the business owner.
• The owners must have a different history of irregular loan repayments.
• The applicant has to be an Indian citizen with a clean background.

Documents required:

To apply for the UCO bank MUDRA loan, the applicant has to submit the following documents. They are,

• Identity proof documents
• Resident proof document
• Caste certificate, if applicable
• Business plan
• Income certificate
• Bank statement of the Last 12 months
• Business establishment certificate
• Age proof
• Passport size photos
• Ration Card

How to apply for a UCO bank MUDRA loan?

The following steps will help you to apply for the UCO bank MUDRA loan. They are,

• Firstly, visit the official website of the MUDRA loan provided by the government.
• Now, on the homepage, you can view the application form. 
• Open it, download the application form, and get a print of it.
• Now, you must complete the application form with all your business details.
• Attach the document that is asked for along with the application form. 
• Finally, submit the application form to the nearest UCO bank. 
• After the application, the bank will review your documents and complete the verification process. Once it is verified, they sanction the loan for your business.

Purposes accepted for MUDRA loans from UCO bank:

The following activities are accepted and covered by the UCO bank MUDRA loan. They are,

• Vehicles: Purchasing a transport vehicle that is further used for transporting goods and passengers. This can be a 2-wheeler scooter, a 3-wheel rickshaw, a taxi, a tractor, a trolley etc.
• Food products: Any food products that are legally accepted, like papads, jams, canteens, and cafes, are accepted and covered. 
• Community/personal activities: Salons, gyms, yoga studios, boutiques, tailorings, vehicle repair shops, etc. 
• Textile products sector: Any textile business can be covered through this Yojana. This can be machine or handmade textiles. 
• Shopkeepers and traders: Small business owners, shopkeepers for various shops, and traders can get financial support for funds through the loan. 
• Equipment finance for MICRO units: They can get Rs. 10,00,000 through this scheme.
• Agriculture and farming: The loan can help provide financial assistance for selling agricultural and vegetation products.

Benefits of UCO Bank MUDRA loan:

The benefits of the UCO bank MUDRA loan are,

• The best business ideas can get financial support if they are from a financially weaker background.
• The MUDRA loan amount varies based on the category. 
• Any business owner meeting the eligible criteria can get a loan of Rs. 10,00,000.
• The repayment time is flexible for a business from 1 to 5 years.
• The interest rate starts from 8.05%.

Conclusion:

India is evolving in the category of business, where every day, a new business idea is emerging. However, it is difficult for a small and medium business owner to get the required funds. So, the government launched the UCO Bank MUDRA loan, which gives loans up to Rs. 10,00,00 based on the business. There are three categories of MUDRA loans: Sishu, Kishore and Tarun Yojana, which differ in the loan amount. More details of this scheme are in the article above. 

FAQs: