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What is Mudra Loan? 

India is home to many micro, small, and medium enterprises (MSME). While these organisations have a sizable workforce, it has historically been a challenge for them to acquire funding. To aid these growing enterprises, the Government of India launched the Pradhan Mantri MUDRA Yojana (PMMY) on April 8, 2015. MUDRA, an acronym for Micro Units Development and Refinance Agency, aims to fund the growth activity in the non-farming and non-corporate sectors. The scheme enables eligible entrepreneurs/enterprises to borrow up to ₹10 Lakhs.

Achievements Under PMMY Since Inception

Financial Year







No. of PMMY Loan Sanctioned








Loan Amount Sanctioned

₹1,37,449.27 Crores

₹1,80,528.54 Crores

₹2,53,677.10 Crores

₹3,21,722.79 Crores

₹3,21,722.79 Crores

₹2,78,520.37 Crores

Loan Amount Disbursed

₹1,32,954.73 Crores

₹1,75,312.13 Crores

₹2,46,437.4 Crores

₹3,11,811.38 Crores

₹3,11,811.38 Crores

₹2,63,741.95 Crores

*Provisional Data

Features of Mudra Loan

Features of Mudra Loan

The Mudra loan has several defining features that distinguish it from other financial products offered by the government. Some of the features of Pradhan Mantri MUDRA Yojana (PMMY) are as follows:


  • It is targeted at businesses engaged in trading, manufacturing, or providing services.

  • The loan amount can be used to fulfill working capital requirements.

  • The funds can be employed for a diverse group of purposes such as the purchase of machinery, growth expansion, business restructuring, and meeting extended working capital requirements, among other things.

  • Both new and existing enterprises can apply for a Mudra scheme.

  • The loan repayment tenure ranges between 3 to 5 years.

  • One can apply for a Mudra Loan through the official www.mudra.org.in portal.

Mudra Loan Infographic

Products Offered Under PMMY

The PMMY scheme offers three products namely Shishu, Kishore, and Tarun to eligible entities. The details of these three products can be found below.

1.  Shishu 

Shishu loans provided under the Mudra scheme allow entrepreneurs on the threshold of starting a business to borrow up to ₹50,000. The following details need to be furnished to avail the Mudra Shishu loan.


  • Quotation of the machinery being purchased and other items that need to be purchased.

  • Details of the plant and machinery that has been purchased.

  • Details of the supplier who is providing the plant and the machinery.

Shishu Loan uder Mudra Scheme

2. Kishore 

Kishore loans stay within the range of ₹50,001 and ₹5,00,000. They are ideal for business people who require additional monetary resources for expanding their trade. Here is the checklist of the documents needed:


  • The balance sheet of the business goes back two financial years

  • Income Tax and Sales Tax returns

  • Bank account statements going back 6 months

  • Estimated balance sheet for the next 1 year or the duration of the loan sought

  • Memorandum of Association (MOA) and Articles of Association (AOA), if applicable

  • A report exploring the technical and economic sustainability of the applicant’s business

Kishore Loan under Mudra Scheme

3. Tarun

Tarun loans under the PMMY scheme range from ₹5,00,001 to ₹10,00,000. Business owners who wish to avail of a Tarun loan need to furnish these documents listed below,


  • Proof of address

  • Proof of identity

  • Certificate of SC, ST, OBC, if applicable

Tarun Loan under Mudra Scheme

Purpose of Mudra Loan

The Micro, Small, and Medium Enterprises (MSMEs) industry has contributed significantly to the ever-growing Indian economy. In addition to that, MSMEs also play a crucial role in generating jobs all over the nation. Keeping all these factors in mind, the Indian government established the Micro Units Development and Refinance Agency (MUDRA) to offer financial support to small businesses and start-ups in India.

Public and private banks and NBFCs registered under this scheme approve and disburse Mudra loans. The primary benefit of such a loan is that it is provided without any collateral. The capital obtained from the Mudra finance scheme can be utilised to grow and even expand the businesses.

Financial Year






No. of PMMY Loans Sanctioned: 






Loan Amount Sanctioned:

1,37,449.27 Crores

1,80,528.54 Crores

2,53,677.10 Crores

321722.79 Crores

3,21,722.79 Crores

Loan Amount Disbursed:

1,32,954.73 Crores

1,75,312.13 Crores

2,46,437.40 Crores

311811.38 Crores

3,11,811.38 Crores

Eligibility for Mudra Loan

Citizens within the non-corporate/non-farming micro, small, and medium enterprises (MSMEs) that reside in rural and urban India can apply for the Mudra scheme. The loan can be availed through participating institutions like banks, NBFCs (non-banking financial companies), and MFIs (micro-finance institutions). The eligibility for MUDRA Loan is listed below.


  • Small manufacturer

  • Artisan

  • Shopkeeper

  • Trader

  • Startup businessman

  • Fruit and vegetable dealer

  • Individuals occupied in agriculture.

Mudra Loan Interest Rates and Charges 

  • Interest Rates: The Pradhan Mantri Mudra Yojana allows eligible applicants to borrow funds up to ₹10 Lakhs. The interest rate on the Mudra loan varies depending upon the applicant’s profile and business requirements as well as the discretion of the lending institution.

  • Processing Charges: No processing fee is applicable on a Mudra loan for amounts up to ₹50,000. For amounts ranging between ₹50,001 and ₹10 Lakhs, an interest rate of 10% and a processing fee of 0.50% are applicable in addition to GST.

Documents Required to Apply for MUDRA Loan 

Before you go ahead and apply for a Mudra loan, you must ensure that a handful of documents are at your disposal. To apply for Mudra Yojana, you will need:


  • Two photographs

  • Proof of identity: Aadhaar card, PAN card, Voter’s ID, passport, bank passbook, driving license

  • Proof of address: Aadhaar card, Residence Certificate, Electricity Bill, Water Bill, government-issued documents

  • Copy of your bank statement for the past 3 months

  • Copy of your caste certificate. This document will be crucial if you are from a reserved caste

  • Business Address Certificate that will count as your business identity and address proof. 

  • Copy of Inventory Purchase Bill if you are taking a PM Mudra loan for the purpose of expanding your business

Benefits of Taking Mudra Loan 

The Mudra loan scheme offers several benefits that should help your business objectives. Some of the most notable benefits are as follows:


  • No Collateral: It can be difficult for a new/upcoming business to provide collateral, and this is where financing through a Mudra loan can come to the rescue.

  • Nominal Interest Rates: The interest rate on a Mudra loan does not exceed more than 1% per month. The interest rate is heavily driven by individual banks and dependent upon the type of borrower.

  • Easy Withdrawal: Once the loan is approved, the loan amount can be withdrawn using the Mudra Loan card at any given point in time, which negates the need for a beneficiary to visit the bank. The benefits of the Mudra loan are notable; hence, you must carefully go through the eligibility criteria before applying. Staying well-informed about the offerings will help you avoid any inconveniences you may face during the application process.

What is a MUDRA Card

The Mudra card is an innovative product that makes credit easily accessible to small businesses while providing flexibility to the card owner at the same time. It can be used as a credit card with an overdraft (loan) limit and can also be used as a debit card for making withdrawals at an ATM. As such, the borrower can use a Mudra card to make multiple withdrawals and credits. Such cards also help with the digitalisation of Mudra transactions, which would be instrumental in creating a credit history for the borrower.

With the PMMY scheme, you can borrow up to ₹10 Lakhs. If your business needs more capital or funds, or if you don’t qualify to borrow under the PMMY scheme, you could always avail of a business loan at Bajaj Markets. At Bajaj Markets, you can apply for business loans as high as ₹75 Lakhs without the need of any collateral. The application process is online, making the procedure quite simple and easy, from approval to disbursal.

Latest News on Mudra Loan

The Union Finance Ministry very recently said that banks and financial institutions have sanctioned approximately ₹15 Lakh Crores to over 28 Crores beneficiaries under the Mudra scheme in the last six years. The Pradhan Mantri Mudra Yojana (PMMY) was launched on April 8, 2015, to promote entrepreneurship within the country. As of March 26, 2021, loans sanctioned by member lending institutions amounted to ₹15.10 Lakh Crores, with the beneficiary count rising up to a total of 28.81 Crores.

PM Mudra Yojana: Rs 9.98 Lakh Crore sanctioned to 16.67 Crores loan accounts in 3 years

On Tuesday, the government informed Parliament that Rs. 9.98 Lakh Crore in loans were disbursed to 16.67 Crores loan accounts under the Pradhan Mantri Mudra Yojana over a three-year period (2015 to 2018).


Mr. Bhagwat Kisanrao Karad, Union Minister of State for Finance stated that the PMMY contributed to the creation of 1.12 Crore of net extra jobs over a three-year period (2015 to 2018).


The statistic for job creation, according to the minister, is based on a survey done by the Ministry of Labour and Employment.


According to the findings of this study, the minister indicated that loans under the Shishu segment contributed to 66% of extra employment produced by enterprises owned by MUDRA recipients, preceded by the Kishore (19%) and Tarun (15%) categories.

- Aug 05, 2022

Mudra loans worth Rs. 36,578 cr sanctioned to 5.4 million borrowers in April

Within the first two months of this financial year itself, loans amounting to Rs. 36,578 Crores were availed under the PMMY scheme – Pradhan Mantri Mudra Yojana. From this amount, Rs. 35,598 Crores was allotted to borrowers from the three categories of Shishu, Kishore, and Tarun.

Between the months of April and July 2021, loans amounting to a total of Rs. 44,126 Crores were sanctioned by banks, of which a total amount of Rs. 38,668 Crores were disbursed.

The PMMY scheme was launched with the objective of facilitating both banks and non-banking financial institutions to provide credit, of up to Rs. 10 Lakhs, to small businesses engaged in manufacturing, services, trading, and other such activities pertaining to the agriculture domain. Under this scheme, loans are disbursed under 3 categories – Shishu (up to Rs. 50,000), Kishore (Rs. 50,000 – Rs. 5 Lakhs), and Tarun (Rs. 5 Lakhs – Rs. 10 Lakhs). Since the inception of the Pradhan Mantri Mudra Yojana seven years ago in April 2015, loans amounting to a total of Rs. 19.22 Lakh Crores have been sanctioned thus far, to over 353 million borrowers. 

Of Rs. 19.22 Lakh Crores that has been sanctioned thus far, Rs. 8 Lakh Crores has been disbursed to the Shishu category, Rs. 6.67 Lakh Crores to the Kishore category and Rs. 4.51 Lakh Crores to the Tarun category.

In 2021-22 alone, loans amounting to Rs. 3.39 Lakh Crores were sanctioned by financial institutions to approximately 53.7 million beneficiaries.

- Jun 14, 2022

Telangana needs more Mudra loans

The Micro Units Development and Refinance Agency (MUDRA) Loan scheme which falls under the ambit of the Pradhan Mantri Mudra Yojana(PMMY) is a scheme which aims to provide collateral-free loans uto Rs. 1o Lakhs to micro and small enterprises at attractive interest rates.

The vice chairman of the Telangana Planning Board has informed that the population benefiting  under the PMMY scheme has starkly fallen from 17.86% in 2020 to 10.62% in 2021. He points out that more and more applicants are approaching banks to avail  Mudra loans but are being rejected by officials who claim that the state has already crossed their sanctioned target. He has, thus, requested the center to sanction 30 Lakh additional Mudra loans to eligible borrowers in Telangana.

- February 25, 2021

FAQs on Mudra Loan

  • ✔️Who is eligible to apply for Mudra Loan?

    Small manufacturers, shopkeepers, artisans, and individuals carrying on agricultural activities like rearing livestock and raising poultry are all eligible to apply for the Mudra loan under the PMMY scheme. All small businesses, whether they’re proprietary concerns or firms in rural or urban areas, can avail Mudra loans. Keep in mind that the applicant must be an Indian citizen above 18 years of age.
  • ✔️What is the maximum amount of loan you can avail under the PMMY scheme?

    You can avail loans under any of the three products offered by the PMMY scheme. Here’s a breakup of the maximum amounts you can borrow under each of these three products.

    1. Shishu loan product: Up to Rs. 50,000
    2. Kishore loan product: Up to Rs. 5,00,000
    3. Tarun loan product: Up to Rs. 10,00,000
  • ✔️Does CIBIL score affect Mudra loan eligibility?

    Your eligibility to apply for a Mudra loan does not depend on your Credit score. So, anyone who fulfils the other criteria required to avail this loan can go ahead and apply for the same, irrespective of their credit history.

  • ✔️Is there any subsidy on Mudra Loan?

    At present, there is no subsidy on MUDRA loans. But, the interest rates are much lower than what banks charge. Through Mudra Loan, credit to small businesses is given at reasonable rates.