Mudra Loan
Pradhan Mantri Mudra Yojana (PMMY)
Government scheme providing collateral-free loans to micro and small businesses in non-farm sector through Shishu, Kishore and Tarun categories.
Who Can Apply?
Eligible Borrowers
Micro and small business units in manufacturing, trading and services, including small vendors and artisans.[web:31][web:45]
Age Criteria
Generally 18–60 years at the time of loan, as per individual bank policy.[web:37]
Business Stage
New and existing micro enterprises seeking funds for starting, running or expanding their business.[web:31]
Loan Categories
Shishu: up to ₹50,000; Kishore: ₹50,001–₹5,00,000; Tarun: ₹5,00,001–₹10,00,000.[web:32][web:45]
Lending Institutions
Public and private sector banks, RRBs, cooperative banks, SFBs, MFIs and NBFCs participating in PMMY.[web:31][web:36]
Creditworthiness
Borrower should have viable business plan and acceptable credit profile as per lender’s norms.[web:31][web:41]
Key Features
Three Loan Slabs
Shishu, Kishore and Tarun categories allow progressive funding as the business grows, from micro needs to larger requirements.[web:32][web:45]
For Multiple Uses
Funds can be used for working capital, machinery, equipment, vehicle purchase and other business purposes allowed by the lender.[web:36]
Wide Network
Available through a large network of banks, NBFCs and MFIs across India for easy access to small borrowers.[web:31][web:36]
Rupay Card / OD
Many banks offer Mudra loans as term loan, overdraft or working capital with debit card access to the limit.[web:32][web:47]
Fast Processing
Simplified appraisal and documentation help micro businesses get relatively quick approvals compared to regular SME loans.[web:32][web:41]
Support to New Entrepreneurs
Encourages first-time entrepreneurs and small units that lack collateral but have viable income-generating activities.[web:31][web:46]
Scheme Benefits
Application Process
Choose Bank / NBFC
Select a PMMY-participating bank or NBFC and decide the suitable category (Shishu, Kishore or Tarun) based on your requirement.[web:31][web:47]
Prepare Business Details
Prepare basic project details or business plan, cost estimates and repayment idea for discussion with the lender.[web:36][web:41]
Submit Application & KYC
Fill Mudra / loan application form and submit KYC, business proofs, bank statements and any other documents asked by the lender.[web:35][web:38]
Appraisal & Disbursement
Lender appraises your proposal and, on approval, sanctions and disburses the Mudra loan limit as per agreed terms.[web:31][web:41]
Documents Required
Frequently Asked Questions
What are the Mudra loan limits under PMMY?
Under PMMY, Shishu covers loans up to ₹50,000, Kishore covers ₹50,001–₹5,00,000 and Tarun covers ₹5,00,001–₹10,00,000.[web:32][web:46]
Is Mudra loan collateral-free?
Mudra loans are generally offered without collateral or third-party guarantee for eligible borrowers, though lenders may set their own risk conditions within guidelines.[web:31][web:45]
Who can apply for a Mudra loan?
Non-farm income-generating micro enterprises in manufacturing, trading and services sectors such as shopkeepers, small units, artisans and service providers can apply.[web:31][web:36]
How can I apply for Mudra loan?
You can apply by visiting a PMMY-participating bank or NBFC branch, or through designated online portals such as Udyamimitra, and submitting the required forms and documents.[web:31][web:44][web:48]
Is there any interest subsidy in Mudra?
Mudra is primarily a collateral-free credit scheme; interest rates are decided by individual lenders as per RBI guidelines and there is usually no separate interest subsidy component.[web:31][web:32]
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