Mudra Loan

PM MUDRA Yojana (PMMY) is a scheme by the Government of India to help small businesses get affordable loans. The goal is to support micro enterprises in trading, making things, offering services, and even farming. The Micro Units Development and Refinance Agency (MUDRA) is like a bank that helps other banks and financial institutions provide these loans. If you're starting a small business, you can get a MUDRA loan of up to Rs 10 lakh from a bank or other similar places nearby. They also offer a MUDRA Card, which works like a credit card, for things like getting money from ATMs and buying stuff using card machines.

Key Highlights of Mudra Loan

Loan Facility Cash Credit, Overdraft & Term Loan
Interest Rates Depends on the bank’s policy decisions
Tenure Depends on the bank’s policy decisions
Loan Amount Up to Rs 10 lakhs
Processing Fees For Shishu category (loans up to Rs 50,000) – No processing fee
For Kishore & Tarun category – depends on the financial institution

Interest Rates of MUDRA Loans

MUDRA doesn't decide the interest rates for PMMY loans. Instead, it lets banks, NBFCs, and MFIs choose the rates. So, if you want a MUDRA loan, just ask your bank or lender about their interest rates.

Fees & Charges

Lending institutions offering MUDRA loans can decide whether to charge upfront fees based on their own rules. But usually, for loans in the Shishu category, many lenders don't charge any upfront fees or processing charges.

Registration Process of PM MUDRA Yojana

Prospective borrowers seeking business loans can go to specific Public and Private Sector Commercial Banks, Cooperative Banks, Regional Rural Banks (RRBs), Micro Finance Institutions, Foreign Banks, and Non-Banking Finance Companies to access loans under PMMY.

Moreover, individuals have the option to apply for MUDRA loans conveniently online through the UdyamMitra portal at

Loan Amount

MUDRA loans are divided into three categories: 'Shishu', 'Kishore', and 'Tarun'. These categories signify the development and funding requirements of applicants.

Category Loan Amount
Shishu Up to Rs 50,000
Kishor Above Rs 50,000 to Rs 5 lakh
Tarun Above Rs 5 lakh to Rs 10 lakh


The loans provided by MUDRA are collateral-free and are covered under the Credit Guarantee Fund for Micro Units (CGFMU), which is managed by the National Credit Guarantee Trustee Company Limited (NCGTC). This provides added security to both borrowers and lenders.

Repayment Tenure

MUDRA hasn't set a specific repayment tenure for loans refinanced through the PMMY scheme. Instead, lending institutions providing MUDRA loans have the flexibility to determine loan tenures according to their own policies and the regulations established by the RBI.


The MUDRA Card is a RuPay debit card that provides a working capital loan through an overdraft facility. This card allows borrowers to make multiple withdrawals and credits, facilitating digital transactions and building credit history. It's issued against a MUDRA loan account and can be used nationwide for cash withdrawals from ATMs/micro ATMs or for making purchases using Point of Sale (POS) machines. Borrowers can repay the amount at any time based on the availability of surplus cash.

Eligibility Criteria of PM MUDRA Loans

MUDRA loans are available for micro-enterprises engaged in manufacturing, services, processing, trading, and activities related to agriculture. Prospective borrowers must have a clean record and not be defaulters with any bank or financial institution. Additionally, they should demonstrate a satisfactory credit history.

Minimum age 18 years
Maximum age 65 years
Who all can avail loan? Loans can be availed by new and existing MSME units
Collateral No collateral or third-party security is required
Maximum Loan Amount up to ₹10 Lakhs
Eligible Lending Institutions Public Sector Banks, Private Sector Banks, Regional Rural Banks, Micro-Finance Institutions
Documents Identity proof, residence proof, Income proof, application form, and passport-size photos
Eligible Entities

Some of the eligible entities are as follows:

  • Small Manufacturers and vendors
  • Artisans
  • Fruits and vegetables Dealer
  • Individuals engaged in agricultural activities like livestock, poultry, and more
  • MSMEs
  • Individuals
  • Proprietary concern
  • Partnership Firm
  • Private Ltd. Company
  • Public Company
  • Any other legal forms

Documents required for availing PM MUDRA Loans

Documentation for availing loan under Shishu Category

To apply for a loan under the Shishu category of the MUDRA Yojana, you'll need the following documents:

  • Identity Proof: Self-attested copy of any of the following: Driving Licence, PAN Card, Voter’s ID Card, Aadhaar Card, Photo IDs issued by Government authority, Passport, etc.
  • Residence Proof: Provide a self-attested copy of any of the following: Latest telephone bill, property tax receipt (not older than 2 months), Voter’s ID Card, Electricity Bill, Aadhar Card, Domicile Certificate, Passbook of proprietor or partners, or the latest bank account statement attested by bank officials, Passport, Certificate issued by local panchayat, government authority, or municipality, etc.
  • Recent Photographs: Submit 2 copies of a recent photograph of the applicant, not older than 6 months.
  • Quotation of Machinery or Items: Provide details such as the name of the supplier or price & details of machinery and/or items to be purchased.
  • Proof of Identity and Address of the Business Enterprise: Submit copies of registration certificates, relevant licenses, or other documents related to the ownership, address, and identity of the business unit, if any.
  • Proof of Category: If applicable, provide proof of category such as ST/SC/OBC/Minority, etc.

Ensure all documents are self-attested and up-to-date for a smooth loan application process under the Shishu category of the MUDRA Yojana.

Documentation for availing loan under Kishor and Tarun Category

To avail a loan under the Kishor and Tarun categories of the MUDRA Yojana, you'll need the following documents:

  • Identity Proof: Self-certified copy of any of the following: Voter’s ID card, PAN Card, Aadhar Card, Driving License, Passport.
  • Residence Proof: Provide any of the following documents (not older than 2 months): Latest telephone bill, Property tax receipt, Voter’s ID card, Electricity bill, Aadhaar Card, Passport of Proprietor/Partners/Directors.
  • Proof of ST/SC/OBC/Minority: Provide relevant documentation if applicable.
  • Identity/Address Proof of the Business Enterprise: Copies of registration certificates, relevant licenses, or other documents related to the identity, ownership, and address of the business unit.
  • Account Statement: Submit the account statement of the last 6 months from the existing banker, if any.
  • Financial Documents:
    • Balance sheet of the units of the last 2 years along with income tax or sales tax returns (Applicable for all cases from Rs. 2 lakhs and above).
    • Projected balance sheets of 1 year in case of working capital limits and for the loan duration in case of term loan (Applicable for all cases from Rs. 2 lakhs and above).
    • Sales achieved during the current Financial Year up to the date of submission of the application.
    • Project report for the proposed project with details of economic and technical viability.
  • Legal Documents:
    • Articles and Memorandum of association or Partnership Deed of Partners/company, etc.
  • Asset and Liability Statement: In the absence of third-party guarantee, an asset and liability statement from the applicant including directors and partners may be required to determine net worth.
  • Photocopies: Provide 2 photocopies of Partners/Proprietor/Directors.

Ensure all documents are properly prepared and up-to-date for a successful loan application under the Kishor and Tarun categories of the MUDRA Yojana.

FAQs on Mudra Loan

1. How to apply for MUDRA loan for business?

MUDRA, short for Micro Units Development & Refinance Agency Ltd., doesn't dictate a fixed repayment period for MUDRA loans. Instead, lending institutions have the flexibility to choose the repayment duration for their MUDRA loan recipients. They take into account factors such as the business's cash flow and their own terms and conditions when setting the repayment terms.

2. What is the maximum limit of loan under MUDRA Yojana?

The highest amount you can get from a MUDRA Yojana loan is Rs 10 lakhs.

3. What is MUDRA loan yojana?

MUDRA Loan Yojana, also known as Pradhan Mantri MUDRA Yojana, is a government program that provides loans up to Rs 10 lakh to small businesses. These loans are offered through various types of banks and financial institutions like commercial banks, small finance banks, microfinance institutions, regional rural banks, and non-banking financial companies (NBFCs).

4. What is the repayment period in MUDRA loan?

MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., doesn't set a specific repayment tenure for MUDRA loans. Instead, lending institutions have the freedom to decide the repayment period for their MUDRA loan borrowers. They consider factors like the cash flow of the enterprise and their own terms and conditions while determining the repayment tenure.

5. How to apply for Shishu MUDRA loan online?

If you want to apply for a Shishu MUDRA loan, you can do it online through the UdyamMitra portal at Alternatively, you can also visit specific cooperative banks, regional rural banks RRBs), public and private sector commercial banks, foreign banks, microfinance institutions, and non-banking financial companies (NBFCs) that provide Shishu MUDRA loans online.