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Looking to start or expand your small business but short on funds? The Pradhan Mantri Mudra Yojana (PMMY) offers a fantastic solution. With the Shishu Loan under this scheme, you can access funding up to ₹50,000, designed specifically for budding entrepreneurs and small business owners. This blog will walk you through how to apply for Shishu Loan in a clear, easy-to-understand manner so you can secure the funds you need.

Let’s see the step by step breakdown!

What is a Shishu Loan?

Before we jump into how to apply for Shishu Loan, let’s first understand what it is. A Shishu Loan is the first stage of Mudra loans under the PMMY scheme, ideal for small businesses and startups that need financial support to get started or grow. Shishu Loans can help you purchase equipment, raw materials, or other resources essential for your business.

Who Can Apply for Shishu Loan?

If you’re a small business owner, trader, artisan, or involved in any micro-enterprise, you can apply for a Shishu Loan. Even if you’re just starting out and don’t have much business experience, Shishu Loan can help you get your business up and running.

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Download Shishu Application Form

How to Apply Shishu Loan – Step by step

To apply for a Mudra loan under the Pradhan Mantri Mudra Yojana (PMMY), specifically for the Shishu category (loans up to ₹50,000), here’s a step-by-step guide to help you complete the application form and understand the necessary steps:

Step 1: Gather Required Documents

Before starting your application, make sure to have the following documents ready:

1. Personal Identification (ID Proof): Aadhar Card, Voter ID, PAN Card, or any valid government-issued ID.
2. Address Proof: Utility bills, Aadhar card, or any other document showing proof of residence.
3. Business Details: Business plan or purpose of the loan, proposed annual sales, and proof of experience or skill.
4. Social Category Proof (if applicable): Proof for SC/ST/OBC/Minority status if applicable

Step 2: Fill Out the Application Form

1. Application Number & Date: Write down the application number (if provided) and the current date.
2. Bank & Branch Details: Fill in the name and branch of the bank where you wish to apply for the loan.

Step 3: Enter Personal Details

1. Applicant’s Name: Provide your full name.
2. Father’s or Husband’s Name: Fill in as applicable.
3. Constitution: Select whether you’re an individual, joint applicant, proprietor, or partnership.
4. Residential & Business Address: Mention if the address is rented or owned.

Step 4: Add Basic Demographics

1. Date of Birth: Enter your date of birth.
2. Educational Qualification: Select your highest educational level.
3. Sex: Tick either Male or Female.
4. Contact Information: Provide your phone number, mobile number, and email address.

Step 5: Provide KYC Details

1. ID Proof Details: Mention the type of ID (Aadhar, Voter ID, etc.) and relevant numbers.
2. Address Proof Details: Provide details of your address proof documents.

Step 6: Business Activity Details

1. Line of Business: Specify the type of business or purpose for which the loan is required.
2. Annual Sales (Proposed): Mention the projected annual sales.
3. Skills & Experience: Indicate whether you’re self-skilled, skilled, or unskilled in the proposed line of business.

Step 7: Social Category Information

1. Select the applicable category, such as General, SC, ST, OBC, or Minority (Muslim, Christian, Buddhist, Sikh, Jain, Zoroastrian, etc.)

Step 8: Loan Requirements

1. Loan Amount: Write the loan amount needed (up to ₹50,000 for Shishu loans).
2. Existing Accounts (if any): Mention any existing bank accounts or loans along with the bank name, branch, account type, and outstanding balance.

Step 9: Declaration

1. Review & Sign: Read the declaration statement carefully.
2. Sign or Thumb Impression: Provide your signature or thumb impression to certify that all information is accurate and complete.

Step 10: Submit the Application

1. Submit the Application at Bank: Hand over your application at the bank branch.
2. Receive Acknowledgement Slip: The bank will give you an acknowledgment slip. This will have your application number, date, and the authorized signatory’s signature.

How to Apply for Shishu Loan for your business

Important Considerations

• No Collateral Required: Mudra loans do not require any collateral security or guarantor
• Eligibility: Any Indian citizen can apply for a Mudra loan if they meet basic eligibility criteria set by the banks 
• Loan Amounts: Loans can be availed up to ₹10 lakhs depending on business needs and category (Shishu, Kishor, Tarun)
• Processing Time: The processing time may vary but typically takes around 7-10 working days after submission of all necessary documents

By following these steps, you can successfully apply for a Mudra loan to support your small business or entrepreneurial venture.

Final Thoughts on How to Apply for Shishu Loan

Applying for a Shishu Loan can be a straightforward process if you follow these steps carefully. From selecting the right bank to completing the form and submitting it, knowing how to apply for Shishu Loan empowers you to take the right steps for your business growth. Remember to have all your documents ready, and provide accurate information to avoid any issues with approval.

Shishu Loans are a wonderful opportunity for small business owners to get the funding they need. Start today by choosing your bank and preparing your documents, and you’ll be well on your way to receiving financial support under the Mudra scheme.

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FAQ – how to apply for Shishu Loan