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The Central Government’s ‘Pradhan Mantri Mudra Yojana (PMMY)’ has proved to be a revolutionary initiative in providing financial strength to small and micro enterprises across the country and connecting them to the mainstream of self-employment. This scheme is no less than a boon especially for women, skilled youth and artisans who want to start their own independent business in the fashion, grooming, tailoring and beauty industries. If you also want to open your own beauty parlor, skin care clinic, bridal studio, tailoring center or modern designer boutique on the basis of your skills, but lack of capital is coming in the way of your dreams, then PM Mudra Yojana opens direct financial avenues for you. The biggest and practical feature of this scheme is that it does not require any bank or financial institution to pledge their ancestral land, house, gold or any property as collateral/security. Under the credit guarantee of the Government of India, banks sanction business expansion loans ranging from initial capital of ₹50,000 to ₹10 lakh directly into your account on very easy terms.
The main objective of Pradhan Mantri Mudra Yojana (Micro Units Development and Refinance Agency) is to provide institutional credit to the non-corporate and non-agricultural small and micro enterprises of the country by connecting them with the formal banking system. Beauty parlors and fashion boutiques are businesses that fall under both ‘service and manufacturing/trading’ categories. Opening a professional beauty parlor requires capital for modern facial machines, hair spa chairs, hair dryers, steamers, make-up and cosmetics kits and interior decoration of the shop. Whereas a boutique business requires commercial sewing machines, overlock and interlock machines, embroidery and pico setup, fabric and display racks. The amount received under Mudra Scheme can be used freely for both shop infrastructure, purchase of machines (CapEx) and daily working capital.
Based on business size, investment requirement and business experience, Mudra Yojana is divided into three clear stages, enabling everyone from budding entrepreneurs to established shopkeepers to get a loan as per their needs:
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1. Shishu Loan (up to ₹50,000): This category is designed for women or youth who are starting a basic level beauty parlor or tailoring shop for the first time from their home or in a small rented room. In this category, loans up to a maximum of Rs 50,000 are approved instantly without any processing fee for purchasing essential machinery, sewing equipment or cosmetic items.
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2. Kishore Loan (Kishor Loan – ₹50,001 to ₹5,00,000): If you have already started a small business or have a professional diploma in beauty and fashion designing and want to open a well-equipped parlor or boutique in the market, then Kishore Loan is most suitable. In this, capital up to Rs 5 lakh is available, with which you can buy advance rent of the shop at a better location, premium salon chairs, commercial sewing machines and textile materials.
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3. Tarun Loan (Tarun Loan – ₹5,00,001 to ₹10,00,000): It is for experienced entrepreneurs who want to upgrade their existing parlor or boutique into a bridal studio, designer lounge or multi-chain salon. With this loan up to Rs 10 lakh, high-end laser equipment, advanced embroidery machines and branded stock can be manufactured.
Under the Mudra Scheme, no fixed interest rate has been fixed by the Reserve Bank of India (RBI), rather it is decided on the basis of the MCLR of the bank and the credit profile of the applicant. Generally, Mudra loan interest rates in government and commercial banks remain in the very competitive range of 8.5% to 12% per annum. The repayment period for this loan ranges from 3 years to a maximum of 5 years (36 to 60 months), which may also include a moratorium period for the initial months. Apart from this, banks issue a ‘MUDRA Card’ (RuPay Debit Card) to the applicant for the working capital share. The credit limit of this card lets you withdraw cash from ATM or swipe POS for bulk purchase of raw materials, threads, clothes or cosmetics, and you have to pay interest only on the amount you actually spend.
To avail the benefits of Mudra Scheme, it is mandatory for the applicant to be a citizen of India and his minimum age should be 18 years. The applicant should not be a previous defaulter of any bank or financial institution. The following documents are required while applying:
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Proof of Identity and Address: Aadhar Card, Voter ID Card, PAN Card, Passport or Driving License.
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Residence Proof: Electricity bill, ration card or rental agreement.
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Business identity and establishment proof: Udyam Aadhaar or Udyam Registration Certificate, Trade License of the local Municipal Corporation or Shop and Establishment Act Registration.
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Project Report (Business Plan): A detailed description of the setup of a beauty parlor or boutique, including estimated costs, quotations for machines to be purchased, rental estimates and a rough outline of potential monthly earnings.
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Financial Documents: Bank account statements of the last 6 months of the applicant, passport size photograph and if already having a shop, then balance sheet or ITR of the last 1-2 years (for Kishore and Tarun loans).
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Certificate of skill or training (optional but beneficial): If you have a certificate in tailoring, cutting or cosmetology from NSDC, Jan Shikshan Sansthan, ITI or any recognized beauty and fashion institute, then banks approve the loan on priority basis.
Getting a loan under PM Mudra Yojana has now become very simple and transparent. You can apply it through two means:
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Online Application (Jansamarth Portal): First of all go to the official loan portal of Central Government ‘Jansamarth’ (jansamarth.in) or ‘Udyami Mitra’ portal (udyamimitra.in). Check your eligibility by going to the ‘Business Activity Loan’ category there. Fill in the basic information required, upload your beauty parlor or boutique’s project report and quotation. After this the portal will show you the list of available banks. Select your preferred bank (like SBI, PNB, Bank of Baroda etc.) and enter digital consent. The application will be transferred online directly to the concerned bank branch.
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Offline Application (Nearest Bank Branch): You can directly visit any nearest Nationalized Bank, Regional Rural Bank (RRB), Small Finance Bank (like AU, Ujjivan, Equitas) or NBFC branch. Take the application form of PM Mudra Yojana from the loan officer there. Select the category ‘Shishu’, ‘Kishore’ or ‘Tarun’ in the form and submit it by attaching all the necessary documents, supplier’s quotation and business plan. After verifying your documents and shop location, the bank approves the loan and issues DD/RTGS for machinery payment directly in the name of the vendors.
Women empowerment is given special priority in Mudra Yojana. To encourage women entrepreneurs, many banks provide additional interest subvention ranging from 0.25% to 0.50% on the normal interest rates. Apart from this, if you combine Mudra Yojana with Prime Minister Employment Generation Program (PMEGP) or state level women entrepreneurship schemes, then government capital subsidy of 25% to 35% in rural areas and 15% to 25% in urban areas can also be availed. For women, running their own beauty parlor or boutique is not only a means of livelihood, but it is also the most powerful medium to establish them in the society as a self-reliant entrepreneur and employment provider for other women.