Mudra Loan eligibility test
Mudra Loan eligibility test is a feature that gives you clarity & your credit limit details because banks will not disburse a mudra loan without it. All banks check the CIBIL report before approval and because the Mudra loan is a collateral-free loan, the bank follows the rule strictly.
Micro Units Development and Refinance Agency (MUDRA) has finalized the eligibility norms for the partner lending institutions for the purpose of availing refinance/ finance for on-lending to micro-units in the manufacturing, trading, and service sector in rural and urban areas.
The eligible institutions, as indicated below, may approach MUDRA corporate office on First Floor, MSME Development Centre, C-11, G Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051 or the nodal officers placed across the country.
SCHEDULED COMMERCIAL BANKS
All scheduled commercial banks in the public and private sector with 3 years of continuous profit track record, net NPAs not exceeding 3%, minimum net worth of Rs.100 cr., and not less than 9% CRAR.
REGIONAL RURAL BANKS
All restructured RRBs have net NPA within 3% ( relaxable in deserving cases), have profitable operations, do not carry any accumulated losses, and CRAR >9%.
MFI / SMALL BUSINESS FINANCE COMPANIES/NBFC
a. Been in lending to Own Account Enterprises, i.e. micro-units with loan size up to Rs.10 lakh for at least 3 years and/or the promoters/management having experience of at least 10 years in this area.
b. Having minimum outreach of 3000 existing borrowers for MFIs.
c. Having suitable systems, processes, and procedures such as internal accounting, risk management, internal audit, MIS, cash management, etc.
d. Meeting the minimum CRAR and other norms stipulated by RBI for MFIs registered as NBFC-MFIs and complying with all the prevailing RBI guidelines. For all categories of NBFCs, registration with RBI will be mandatory.
e. Should be a member of a Credit Bureau.
f. Rating requirement:
a. MFIs (including NBFC-MFIs) – minimum Capacity Assessment Rating of mfr5 by CRISIL or its equivalent.
b. NBFCs – minimum external rating of BB- for small NBFCs having a total portfolio below Rs. 500 crore and BBB+ for NBFCs having a portfolio of Rs. 500 crore or more. For small NBFCs not having the external credit rating, they should possess satisfactory borrowing arrangements with any Scheduled Commercial Bank for a minimum of 2 years.
g. Recovery performance: For MFIs: Portfolio at Risk (i.e. overdue more than 30 days) within 5%. For others – The net NPA is not higher than 3%.
h. For all MFIs, it will be desirable to have undergone a Code of Conduct Assessment (COCA) with a minimum score of 60 or equivalent.
1. The assistance will be based on the internal credit appraisal process by MUDRA / SIDBI.
2. The assistance shall be priced based on risk assessment, geographical distribution, social parameters, etc.
3. The Board of MUDRA shall fix prudential ceilings for lending to various categories of borrowers as also limits for individual borrower/borrower groups in line with RBI instructions on the subject.
4. The detailed terms of assistance shall be laid down in the loan agreement to be executed with the individual intermediary.
These parameters are not final for the mudra loan eligibility test and may vary from bank to bank. Now banks are changing their policy regularly and NPAs are making it tougher.
It is basic criteria that help you to understand what is eligibility and how much CIBIL is important to get a loan maximum and low-interest rate.
If your CIBIL and eligibility criteria are low then the bank may charge a high-interest rate on less disbursement. We also suggest you check your all documents carefully and prepare your project report before applying.
Please note MUDRA is a refinancing firm only. There is no fixed parameter to check the mudra loan eligibility test and it is very bank to bank.
Source: MUDRA ORG IN
Author:- Jeevan Pant