Mudra Loan Scam – Beware of Fraudulent Sanction Letters

Pradhan Mantri Mudra Loan (PMMY) is a Micro Finance scheme sponsored by Govt. of India. The primary aim of this scheme is to help MSME (micro, small & medium enterprises) units to get easy access to collateral free finance. Unfortunately, some fraudsters are luring people with fake loan sanctions letter and perpetrating scam by demanding professing fee.

The fake loan sanction letter appears as below.

Mudra loan fake sanction letter.

Shockingly the offer letter picture of Prime Minister Shri. Narendra Modi and official logo the Mudra loan scheme to make it look like real deal. The letter has poor grammar, hence not difficult to realize that it’s a fake and scam.

Who Offers Mudra Loan?

As per official website there are currently 206 financial institutions which offer Mudra loan. It includes, PSU banks, private banks, NBFC (Non-banking finance institutions, Co-op society, Micro finance companies etc. Mudra is refinancing scheme by the central govt, which means the central govt refinances the original financing institution as per the scheme agreement.

Is Mudra Loan Finance Pvt Ltd fake scam company?

It appears so. First of all a company named “Mudra Finance Ltd” does not exit. Secondly, this company is not listed as official finance partner in official Mudra website.

The offer letter demands Rs 3200 processing fee & submission of various documents.

It is risky to submit KYC documents to suspicious companies. They may use it for identity theft or other fraudulent activities. The letter also says that the processing fee is refundable within 15 days but appears to be dubious promise.

More information about Pradhan Mantri Mudra Yojana

MUDRA which stands for Micro Units Development and Refinance Agency Ltd is a refinance agency and not a direct lending institution. MUDRA provides refinance support to its intermediaries viz. Banks, Micro Finance Institutions and NBFCs, who are in the business of lending for income generating activities in the non farm sector in manufacturing, processing, trading or service sector and who in turn will finance the beneficiaries.

Why MUDRA Scheme?

The biggest bottleneck to the growth of entrepreneurship in the Non–Corporate Small Business Sector (NCSBS) is lack of financial support to this sector. More than 90% of this sector does not have access to formal sources of finance. GoI is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSBS segment or the informal sector for bringing them in the mainstream.

MUDRA Loan Salient Features

Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has already created its initial products / schemes. The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also to provide a reference point for the next phase of graduation / growth to look forward to. The financial limit for these schemes are:-

  • a. Shishu : covering loans upto  50,000/-
  • b. Kishor : covering loans above  50,000/- and upto  5 lakh
  • c. Tarun : covering loans above  5 lakh to  10 lakh

MUDRA’s delivery channel is conceived to be through the route of refinance primarily to Banks/NBFCs/MFIs.
At the same time, there is a need to develop and expand the delivery channel at the ground level. In this context, there is already in existence, a large number of ‘Last Mile Financiers’ in the form of companies, trusts, societies, associations and other networks which are providing informal finance to small businesses.

Who are eligible to for PMMY Scheme?

Any individual including women, proprietary concern, partnership firm, private limited company or any other entity are eligible applicant under PMMY loans, whose loan requirement is up to  10 lakh. Generally, PAN card, IT return or GST return is not required for availing loan upto Rs 50,000 under Shishu category. Atleast 6 months bank statement maybe required for Kishore & Tarun category.

Loan terms, rate of interest, recovery proceeding may be decided by banks/financial institutions. Borrowers are advised read and understand all the terms and conditions carefully.

MUDRA Loan Scam: The Conclusion

Apply for Mudra loan through official financing partners (as listed on Mudra website) or visit your nearest bank or reputed financial institution to avoid getting scammed. Rs 3200 processing fee may look small amount to risk for 5 lakh loan, especially if you are desperate for credit.

If you have any questions or concerns feel free to post a comment.

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