Pradhan Mantri Mudra Yojana (PMMY) was launched to give financial support to India’s millions of small businesses, street vendors, artisans, and self-employed individuals who cannot access formal bank credit. The key advantage: no collateral, no guarantor, and a government-backed guarantee behind every loan.
Over 47 crore loans have been disbursed under this scheme since launch, with 68% going to women borrowers.
The Four Loan Categories
| Category | Loan Amount | For |
|---|---|---|
| Shishu | Up to ₹50,000 | New or very small businesses just starting out |
| Kishore | ₹50,001 – ₹5 lakh | Established businesses looking to grow |
| Tarun | ₹5 lakh – ₹10 lakh | Growing businesses with proven track record |
| Tarun Plus | ₹10 lakh – ₹20 lakh | Businesses with good repayment history on previous Mudra loans |
Who Can Apply?
- Small business owners (shops, tailoring, salon, repair, etc.)
- Street vendors and hawkers
- Artisans and craftspersons
- Farmers engaged in non-farm activities (food processing, etc.)
- Transport operators (auto-rickshaw, small goods vehicle owners)
- Micro-manufacturers
The business must be in the non-farm sector. There is no minimum income requirement for the Shishu category.
How to Apply
- Online at udyamimitra.in — the official PMMY portal. Fill in the application, upload documents, and submit. You will be matched with a lender.
- Visit any bank branch — all public sector banks, regional rural banks, microfinance institutions, and NBFCs registered with MUDRA offer these loans. Walk in and ask for a “PM Mudra Yojana loan.”
- Visit a CSC — Common Service Centres can also help you apply online.
Documents Required
- Aadhaar card and PAN card
- Proof of residence
- Proof of business (registration, shop license, or a simple self-declaration for very small businesses)
- Passport-size photo
- Bank account statement for the last 6 months (for Kishore and above)
- Business plan or brief description of how you will use the loan
Interest Rates and Repayment
Interest rates vary by bank and loan category — typically ranging from 8.5% to 12% per year. There is no government subsidy on the interest rate, but rates are competitive because the government’s MUDRA guarantee reduces the bank’s risk.
Repayment tenure is typically 3–5 years with a possible moratorium period of 6 months at the beginning.
Mudra Card: Your Working Capital Tool
Mudra loans often come with a Mudra Debit Card — a pre-loaded card you can use like an ATM card to withdraw working capital as needed, rather than taking the full loan amount at once. This is especially useful for businesses with fluctuating daily cash needs.
Quick Summary
- Loans from ₹50,000 to ₹20 lakh for small businesses
- No collateral required up to ₹10 lakh
- Apply online at udyamimitra.in or at any bank branch
- All banks, RRBs, and MFIs offer Mudra loans
- 68% of beneficiaries are women
All information sourced from mudra.org.in and udyamimitra.in. MeraHaq is not affiliated with any government body.