Pradhan Mantri Mudra Yojana (PMMY) is the Government of India’s flagship scheme designed to unlock the potential of non-farm micro and small enterprises by offering unsecured loans up to ₹20 lakhs. Since its launch in April 2015, Mudra has financed millions of entrepreneurs—from roadside vendors to small manufacturers—fueling economic growth and creating employment across rural and urban India. Whether you run a tailoring unit, a repair shop, a dairy farm or a food-processing venture, Mudra can provide the working capital or asset funding you need to scale up.
✨ Key Highlights
- Unsecured Loan up to ₹20 lakhs No collateral requirement removes a major barrier for new and small businesses. You can borrow as little as ₹10,000 under Shishu or go all the way up to ₹20 lakhs with Tarun Plus without mortgaging property or arranging third-party guarantees.
- Four Growth-Stage Categories Mudra’s loan products—Shishu, Kishore, Tarun and Tarun Plus—map precisely to your business lifecycle. Whether you’re testing an idea or ready to expand operations, you get the right loan size and tenor.
- Speedy Processing Under Banking Codes & Standards Board of India (BCSBI) guidelines, applications for up to ₹5 lakhs must be decided within 14 business days. Many MLIs (member lending institutions) further expedite smaller loans in just a week.
- Nationwide Accessibility You can apply through over 300 scheduled commercial banks, regional rural banks, co-operative banks, small finance banks (SFBs), microfinance institutions (MFIs) and eligible NBFCs—ensuring availability even in remote areas.
- Flexible End-Use Funds can be used for working capital, purchase of machinery or equipment, raw materials, shop setup, transport vehicles or any income-generating non-farm activity including allied agricultural ventures like poultry, beekeeping or agro-processing.
📊 Loan Categories for Pradhan Mantri Mudra Yojana
- Shishu (₹0–50,000) Ideal for first-time entrepreneurs and small vendors. Use Shishu loans to procure raw materials, small tools or daily working capital. Many banks waive processing fees for Shishu, making it virtually cost-free to apply.
- Kishore (₹50,001–5,00,000) Suited for businesses that have moved beyond the pilot stage and need funds to diversify inventory, upgrade equipment or enhance shop fit-outs. Traders, artisans and service providers often leverage Kishore loans to boost turnover.
- Tarun (₹5,00,001–10,00,000) For enterprises with proven cash flows that require substantial funds to expand production lines, increase capacity or add staff. Dairy farmers expanding herd size, small factories adding a second shift or service outlets opening new branches can all benefit.
- Tarun Plus (₹10,00,001–20,00,000) The highest tranche for experienced borrowers with a track record of timely repayments on previous Mudra loans. Tarun Plus can fund large-scale expansions such as new manufacturing units, bulk machinery purchases or entry into new markets.
✅ Who Can Apply for Pradhan Mantri Mudra Yojana?
- Individuals & Proprietors First-generation entrepreneurs, self-employed individuals and proprietorship firms can directly apply, using personal identification and business proof.
- Partnership Firms & Companies Small partnership firms along with private and public limited companies engaged in non-farm activities are eligible, subject to clean credit records.
- Self-Employed Professionals Doctors, consultants, architects, trainers and other professionals who provide services can leverage Mudra for equipment purchase, office renovation or working capital.
- Any Legal Entity From transport operators and repair shops to food processors, artisans, traders and service providers—if you run an income-generating non-farm venture, you qualify.
Important Note: Applicants must not be defaulters on any bank or financial institution loans. Some lenders may assess your technical skills or professional experience for specialized activities like manufacturing or food processing.
💸 Interest Rates & Fees
- Interest Rates: Determined by each Member Lending Institution (MLI) in line with RBI’s base rate or external benchmark lending rate. Typical Mudra loan interest rates range between 8% and 14% annually, varying by borrower profile, loan amount and repayment history.
- Processing Charges: Most banks waive processing fees for Shishu loans (up to ₹50,000). For Kishore, Tarun and Tarun Plus categories, nominal charges (0.5%–2% of loan amount) may apply. Always confirm fees in your sanction letter.
- Prepayment & Part-Payment: Some MLIs allow part-payment or full prepayment without penalty, enabling you to save on interest. Verify prepayment terms before signing your loan agreement.
🚨 Beware of unauthorized agents or middlemen claiming to expedite your Mudra application. Mudra Ltd. does not engage third-party brokers—apply only through official MLI branches or the Udyami Mitra portal.
📝 How to Apply for Pradhan Mantri Mudra Yojana
1. Online Registration on Udyami Mitra
- Visit the Mudra portal (www.mudra.org.in) and click Apply Now.
- You will be redirected to the Udyami Mitra portal.
- Choose your user type: New Entrepreneur, Existing Entrepreneur or Self-Employed Professional.
- Enter your name, email and mobile number to generate an OTP.
- Verify the OTP and create your login credentials.
2. Complete Your Business Profile
- Fill in personal details, including identity and address proofs.
- Provide business information: enterprise name, nature of activity (manufacturing/trading/services/allied to agriculture), location and years in operation.
- Outline your financials: existing banking/credit relationships, proposed loan amount, usage plan and monthly cash-flow projections.
- If needed, choose a hand-holding agency for project-report assistance; otherwise proceed to loan application.
3. Select Loan Category & Lender
- Pick the appropriate Mudra loan category (Shishu/Kishore/Tarun/Tarun Plus) based on your funding requirement.
- Choose your preferred Member Lending Institution (public bank, private bank, SFB, MFI or NBFC).
4. Upload Documents & Submit
- Scan and upload all mandatory documents (see checklist below).
- Review your application, agree to terms and then submit electronically.
- You will receive a unique Application Number for tracking the status via SMS or portal login.
📂 Documents Checklist
| Category | Mandatory Documents |
|---|---|
| Shishu (≤ ₹50 K) | • Proof of Identity (Aadhaar/PAN/Voter ID/Passport) • Proof of Address (electricity bill, telephone bill, bank statement) • 2 passport-size photos • Quotation of machinery/items to be purchased • Enterprise address proof (license, registration certificate) |
| Kishore & Above | All of the above, plus: • Last 6 months’ bank statements • Last 2 years’ balance sheets and Income Tax Returns (for loans > ₹2 lakhs) • Projected financial statements • Partnership deed or Memorandum & Articles of Association • Asset & Liability statement if no third-party guarantor |
Ensure each document is self-attested, clear and within the portal’s file-size limits.
🔄 Post-Disbursement Guidelines
- Loan Agreement & KYC: Promptly complete your loan agreement signing and KYC formalities at the lender’s branch to unlock funds.
- Tranche Disbursement: Funds can be released in instalments aligned to project milestones—ideal for phased equipment purchases or staged expansion.
- Timely Repayment: Adhere to your EMI schedule. On-time payments build credit history, paving the way for Tarun Plus eligibility and better future terms.
- Expand with Allied Schemes: After successful Mudra repayment, explore schemes like Stand-Up India for bank guarantees or PMEGP for capital subsidies to diversify into new ventures.
🌐 Related Schemes
- Bhausaheb Fundkar Phalbag Lagvad Scheme
- PM-KISAN Yojana 2025
- Mini Tractor Scheme
- Startup India Initiative
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
❓ Frequently Asked Questions
Q1. Can Khadi or handicraft units apply for Mudra loans? Absolutely. Any income-generating non-farm activity, including Khadi, handicrafts, textile weaving or tool manufacturing, qualifies under Mudra.
Q2. Is purchasing a CNG taxi or tempo covered? Yes, Mudra funds can finance commercial vehicles if they are integral to your income-generating activity.
Q3. Can I apply through my existing bank branch? Yes, approach your branch, request the Mudra application form and submit as per their internal guidelines. Ensure you meet the lender’s credit and documentation norms.
Q4. Are Income Tax Returns mandatory for larger loans? For loans above ₹2 lakhs, MLIs typically require audited financials and ITRs. For smaller loans up to ₹2 lakhs, many banks do not insist on ITRs.
Q5. What if my loan is rejected? Ask your lender for the reason and rectify any documentation gaps or incomplete project details before reapplying.
🎯 Conclusion
Pradhan Mantri Mudra Yojana has transformed India’s small-business landscape by democratizing access to credit. From a ₹10,000 Shishu loan igniting an artisan’s workshop to a ₹20 lakh Tarun Plus loan fueling factory expansion, Mudra empowers entrepreneurs at every stage.
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