PM MUDRA Yojana
Complete Guide to Eligibility, Benefits & Application
Pradhan Mantri MUDRA Yojana provides collateral-free loans up to ₹10 lakh to micro enterprises for business growth and expansion.
Pradhan Mantri MUDRA Yojana (PMMY) is a flagship scheme launched by the Government of India to provide loans up to ₹10 lakh to non-corporate, non-farm small/micro enterprises.
The scheme aims to bring millions of small businesses into the formal financial system and help them grow with affordable credit.
MUDRA loans are available from banks, NBFCs, and MFIs across India, making it one of the most accessible funding options for small entrepreneurs.
“MUDRA Yojana is transforming the lives of small entrepreneurs by providing easy access to credit without the need for collateral.”
What is MUDRA (Micro Units Development & Refinance Agency)?
MUDRA is a refinancing institution that provides funding support to banks, NBFCs, and MFIs for on-lending to micro enterprises.
The scheme categorizes loans into three segments: Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh).
These categories help address different stages of business growth and varying funding requirements of micro entrepreneurs.
Who is Eligible for the PM MUDRA Yojana?
MUDRA loans are available to a wide range of business owners:
Small Business Owners
Proprietors of small shops, vendors, and service providers.
Manufacturers
Small manufacturing units and artisans producing goods.
Service Providers
Tailors, salons, repair shops, and other service businesses.
Traders
Small traders and shopkeepers involved in retail business.
Allied Agriculture
Activities like dairy, poultry, beekeeping, and fishery.
ℹ️ Eligibility Checklist:
- •Must be an Indian citizen above 18 years of age.
- •Should have a viable business plan for non-farm income generating activity.
- •Business should not be involved in agricultural activities directly.
What Types of Projects are Covered?
MUDRA loans can be used for various business purposes:
Working Capital
Day-to-day business expenses, inventory purchase, and operational costs.
Machinery Purchase
Buying equipment and machinery for manufacturing or service delivery.
Business Expansion
Opening new outlets, expanding production capacity, or diversifying services.
Transport Vehicles
Purchase of vehicles for goods transportation or passenger services.
Shop Renovation
Upgrading business premises, interiors, and facilities.
Technology Upgrade
Investing in computers, software, and digital infrastructure.
Key Benefits
Max Loan Amount
₹10L
Get loans up to ₹10 lakh under the Tarun category for established businesses.
Collateral Required
0%
No collateral or third-party guarantee required for MUDRA loans.
Lending Institutions
Various financial institutions provide loans under this scheme:
- ✓Public Sector Banks (SBI, PNB, BOB, etc.)
- ✓Private Sector Banks (HDFC, ICICI, Axis, etc.)
- ✓Regional Rural Banks
- ✓Microfinance Institutions (MFIs)
- ✓NBFCs
How to Apply? (Step-by-Step)
Choose the Right Category
Select Shishu (up to ₹50K), Kishore (up to ₹5L), or Tarun (up to ₹10L) based on your funding needs.
Need help choosing? Contact us →Prepare Business Plan
Create a simple business plan outlining your business model, revenue projections, and fund utilization.
Visit Bank/NBFC
Approach any scheduled bank, NBFC, or MFI with your documents and business plan.
Application Submission
Fill the MUDRA loan application form and submit with required documents.
Loan Disbursement
After verification and approval, loan amount is disbursed to your account.
ℹ️ Approval Timeline: MUDRA loans are typically processed within 7-15 working days depending on the loan amount and lender.
Documents Required
Note: Document requirements may vary slightly between lenders. We help you prepare a complete documentation package.
Common Mistakes Applicants Make
⚠️ Unclear Business Purpose
Not clearly defining how the loan will be used can lead to rejection.
⚠️ Incomplete Documentation
Missing documents or incorrect information causes delays and rejections.
⚠️ Poor Credit History
Existing defaults or poor CIBIL score can affect loan approval.
⚠️ Unrealistic Projections
Overstating revenue or understating expenses in the business plan.
Frequently Asked Questions
What is the interest rate on MUDRA loans?
Interest rates vary between 8-12% depending on the lender and loan category. There is no fixed rate mandated by the government.
Can I apply for MUDRA loan online?
Yes, you can apply through the Udyamimitra portal or directly visit a bank branch.
Is there any subsidy on MUDRA loans?
MUDRA loans don't have direct subsidies, but some state governments offer interest subvention schemes.
Can I get a MUDRA loan for agriculture?
Direct agriculture is not covered, but allied activities like dairy, poultry, and fishery are eligible.
What is the repayment period for MUDRA loans?
Repayment period ranges from 3 to 5 years depending on the loan amount and lender terms.
Can existing business owners apply?
Yes, both new and existing businesses can apply for MUDRA loans.
Conclusion
PM MUDRA Yojana has revolutionized access to credit for small entrepreneurs across India.
With collateral-free loans up to ₹10 lakh, flexible repayment options, and wide availability through banks and NBFCs, MUDRA makes business funding accessible to everyone.
Whether you're starting a new venture or expanding an existing business, MUDRA can provide the financial support you need.
Need Assistance With MUDRA Application?
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