Did you know that 90% of India’s retail sector is unorganised and consists of small grocery/kirana stores. As per the latest survey, there are around 12 million grocery stores across India. Most of these shops face regular cash flow problems due to a shortage of capital. This shortage often prevents them from upgrading their technology and expanding their business. The best solution for such stores is getting a business loan. A business loan helps them overcome these challenges by providing the required financial assistance.
Features of Business Loans for Grocery Store
Most traditional business loan options available for grocery stores in India have similar features. The following are the key features of such loans:
- Unsecured: Most of the loans that are available for grocery stores do not require any need for collateral.
- Simple documentation: The documentation process involved in the loan granting process is easy and straightforward.
- Flexible repayment tenure: Most of these loans have repayment periods ranging between 3-5 years.
- Quick approval: These business loans are approved quickly as they usually cover less amount.
MUDRA loan for Grocery stores
MUDRA is a loan scheme launched under the PMMY by the Government of India. The main objective of MUDRA is to support small and micro enterprises across the country by providing reasonable and easily accessible credit. This government-backed scheme is one of the best options for grocery store owners. Here’s why.
Most of the traditional loan schemes in India require collaterals for granting loans. But mudra does not require any, which makes it perfect for small business owners who may not have assets to pledge. Additionally, being a government-backed scheme, it provides flexible loan tenure and the best interest rates available in the market. The loan application process is also quite straightforward with faster approvals.
Below are some of the key details of the MUDRA loan scheme available for grocery store owners:
- Loan amount: Through the MUDRA loan scheme, your grocery store can avail up to Rs. 10 lakhs as loan amount.
- Loan tenure: The repayment period of these loans can be extended up to 5 years.
- Lower interest rates: It has lower interest rates compared to traditional business loans. It usually ranges between 8.5% to 12% per annum.
- Lightweight application process: The entire application process and approval is much smoother and faster.
Eligibility Criteria
To avail a MUDRA loan for your grocery store, you must need to meet the below eligibility criteria:
- The applicant must be between the age of 18 and 65.
- He/she should be an Indian citizen.
- The grocery store must be owned and registered in the applicant’s name.
- The applicant should have a good credit history.
- The maximum loan amount required should be less than Rs.10 lakhs.
Documents required
- Identity proof (Aadhar card, PAN card, or voter ID)
- Address proof (utility bills orAadharr card)
- Applicant passport-size photo.
- Proof of category like SC/ST/OBC/Minority, if applicable
- Business registration certificate
- Last six month’s bank statements.
- Project report/ Business plan
How can we help you?
In the above list, we saw that a Business plan/project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval.
With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your project report.
