Mudra Loan Interest Rates Across Banks in 2024

In 2024, the Mudra loan scheme, initiated by the Indian government, continues to be a vital tool for small businesses and entrepreneurs seeking financial support. This scheme offers loans to micro and small enterprises to foster growth and development in the sector. Understanding the interest rates for Mudra loans across various banks is crucial for applicants to make informed decisions. This comprehensive guide provides a detailed overview of the Mudra loan interest rates offered by different banks, their terms, and the factors influencing these rates.

What is a Mudra Loan?

The Mudra (Micro Units Development and Refinance Agency) loan scheme is designed to provide financial assistance to micro and small enterprises. It aims to promote entrepreneurship by offering affordable credit to individuals who do not have access to formal banking services. Mudra loans are classified into three categories:

• Shishu: For startups and very small enterprises with a loan requirement of up to ₹50,000.
• Kishore: For businesses looking to scale up with a loan requirement between ₹50,000 and ₹5 lakh.
• Tarun: For established businesses requiring a loan between ₹5 lakh and ₹10 lakh.

Mudra Loan Interest Rates by Bank

Here is a detailed comparison of Mudra loan interest rates across various banks in 2024:

1. State Bank of India (SBI)

   • Interest Rate: 7.25% - 8.65% per annum
   • Features: SBI offers competitive rates with flexible repayment options. The bank provides loans under the Mudra scheme with a processing fee that may vary based on the loan amount.

2. HDFC Bank

   • Interest Rate: 8.00% - 9.00% per annum
   • Features: HDFC Bank offers a range of Mudra loans with attractive interest rates. The bank's Mudra loans come with various features, including quick disbursal and minimal documentation.

3. ICICI Bank

   • Interest Rate: 8.25% - 9.15% per annum
   • Features: ICICI Bank provides Mudra loans with competitive interest rates and flexible repayment tenures. The bank's offerings include support for businesses through various stages of growth.

4. Axis Bank

   • Interest Rate: 8.50% - 9.50% per annum
   • Features: Axis Bank offers Mudra loans with a range of interest rates. The bank provides personalized support and assistance to entrepreneurs, ensuring a smooth loan application process.

5. Bank of Baroda

   • Interest Rate: 7.75% - 8.85% per annum
   • Features: Bank of Baroda's Mudra loans are designed to support small businesses with competitive interest rates and various repayment options.

6. Punjab National Bank (PNB)

   • Interest Rate: 8.00% - 9.00% per annum
   • Features: PNB offers Mudra loans with attractive interest rates and support for micro and small enterprises. The bank emphasizes customer service and ease of access.

7. Kotak Mahindra Bank

   • Interest Rate: 8.00% - 9.20% per annum
   • Features: Kotak Mahindra Bank provides Mudra loans with competitive interest rates and a focus on quick processing and disbursal.

8. Canara Bank

   • Interest Rate: 7.50% - 8.70% per annum
   • Features: Canara Bank's Mudra loans come with competitive rates and various features designed to support small business growth.

Factors Influencing Mudra Loan Interest Rates

Several factors influence the interest rates on Mudra loans, including:

• Creditworthiness: The applicant's credit score and financial history play a significant role in determining the interest rate.
• Loan Amount: Larger loan amounts may attract higher interest rates due to increased risk for the lender.
• Repayment Period: The duration of the loan repayment can impact the interest rate, with longer terms potentially leading to higher rates.
• Bank Policies: Each bank has its own policies and criteria for setting interest rates on Mudra loans, influenced by their cost of funds and market conditions.

Comparing Mudra Loan Options

When choosing a Mudra loan, it's essential to compare interest rates, loan terms, and additional features offered by different banks. Consider the following tips:

• Check Interest Rates: Review and compare the interest rates from various banks to find the most favorable option for your business needs.
• Evaluate Loan Features: Look for banks that offer flexible repayment options, minimal processing fees, and additional support services.
• Read Terms and Conditions: Understand the terms and conditions associated with the loan, including any prepayment penalties or hidden charges.

Conclusion

In 2024, Mudra loans remain a valuable resource for micro and small enterprises in India. With a range of interest rates and features offered by different banks, it's crucial for entrepreneurs to conduct thorough research and choose the loan that best meets their needs. By comparing interest rates and understanding the factors that influence them, applicants can make informed decisions and secure the financial support necessary for business growth and success.