Fact Check: This letter on circulation relating to Mudra Loans is fake

The Government of India came up with the Mudra Loan Scheme to help small businesses which had found it hard to secure funding

New Delhi, Jan 31: A letter is in circulation with the claim that under the PM Mudra Yojana a loan of Rs 10,00,00 will be granted upon payment of Rs 1,750 as loan agreement charges.

The letter stated that the sanctioned loan amount of Rs 10,00,00 will be sanctioned and the tenure for the repayment is 36 months. Attributing the letter to the Finance Ministry of India, it also claims that the rate of interest would be 5 per cent under the NRI Funding Scheme. The letter which has gone viral also states that there would be nil charges for fees on part payment.

PIB Fact Check, the government's fact check mechanism has said that this letter is fake. The letter is fake and the Finance Ministry of India has issued no such letter, PIB Fact Check said on its Twitter handle.

For more details on the Mudra Loans, internet users can visit.

On the website of Mundra, it is said that the biggest bottleneck to the growth of entrepreneurship is in the Non-Corporate Small Business Sector (NCBS) is the lack of financial support. Over 90 per cent do not have access to formal sources of finance. The Government of India set up the Mudra Bank through a statutory enactment to cater to the needs of the NCBS segment or the informal sector in a bid to bring them to the mainstream,.

The Mudra Loan Scheme was launched by Prime Minister, Narendra Modi in April 2015. The full form of Mudra is Micro Units Development and Refinery Agency Ltd. The eligible applicants can apply for Mudra Loan to start and also expand their business, purchase machinery, equipment etc. They can also avail the loan for working capital needs. The government says that the loan amount can range from Rs 50,000 to Rs 10,00,00. It would not need any collateral, the Indian Government also said.

Further, it is stated that the loans are provided through a network of banks and financial institutions. The loans are disbursed based on the requirement and needs of the borrower. Since its introduction, the scheme has become widely popular in the country and has gone a long way in providing access to finance to several small businesses which have otherwise found it hard to secure funding.

If at all you come across such letters with offers, do fact check them or write in to us so that we can fact check them for you.

In conclusion, the letter in circulation that you can avail a loan of up to Rs 1 lakh on payment of Rs 1,750 is fake. Beware of such claims and do not circulate them.