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What is E Mudra Loan

MUDRA loans that can be availed online are known as e-MUDRA Loans. Many commercial and public sector banks, small finance banks, NBFCs, and MFIs accept applications for e-MUDRA loans. Additionally, online applications are also available via the Udyami Mitra Portal. The lending programme was established to help banking institutions lend money to micro and small businesses. Thus generating income outside of the corporate and agricultural sectors (subject to the enterprises with credit requirements lower than ₹10 Lakhs).


Candidates can easily apply for the MUDRA loans online by selecting their preferred lender and desired loan amount. MUDRA loans are disbursed through banks, MFIs, and NBFCs, as was previously noted. In order to expedite the loan application process, applicants can submit the loan application, other supporting papers, and their preferred lending partner online.

What are the Goals and Objectives of e-MUDRA Loans

An e-Mudra loan can be used for establishing a business, expanding, or meeting its working capital requirements. The e-Mudra loan can be availed from a number of private and public sector banks.

The main target of the MUDRA programme is the nation's MSME units. It was created specifically to provide capital, protect small business owners from money lenders' exploitation, and aid 1.5 crore new business owners in growing their operations. The MUDRA scheme provides loans without the need for security. The interest rate on the loans obtained under this arrangement is not fixed. The base rate is applied to interest, plus 1-7%. Depending on the risks involved and the customer's profile, this could also be higher.


By providing these emerging businesses with collateral-free funding, the MUDRA scheme has benefited the MSME sector in following ways:

  • Support for refinancing provided to NBFCs and banks to enable increased lending funds

  • Loans for two-wheelers and subsequent lending to companies engaged in trading, manufacturing, tractor financing, services, and related industries.

  • In addition to providing financial help, MUDRA also gives MSME firms empowerment through financial education and other social support services.

  • Shishu loans up to ₹50,000, Kishore loans up to ₹5,00,000 and Tarun loans up to ₹10 lakh are the three lending programmes offered by MUDRA.

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E-Mudra Loan Interest Rate

Many financial institutions provide Mudra loans at various interest rates in order to assist income-generating non-agricultural enterprises that need a credit of less than ₹10 Lakhs. The interest rate on Mudra loans depends on the applicant's eligibility and other reasons. Below there is a table showing the interest rates charged by various Indian banks offering Mudra loans.

Bank Name 

Rate of Interest 


State Bank of India (SBI)

Linked to MCLR

1 to 5 years


Linked to Bank’s Base Rate and Rating

1 to 5 years


Depends on the guidelines

At discretion of the bank

Bank of Baroda

9.65% per annum

At discretion of the bank

UCO Bank

From 8.85% per annum

At discretion of the bank


Depends on the guidelines

At discretion of the bank

Indian Overseas Bank

Depends on the guidelines

At discretion of the bank

Canara Bank

Depends on the guidelines

Up to 7 years

Central Bank of India

Depends on the guidelines

At discretion of the bank

Allahabad Bank

Depends on the guidelines

1 to 5 years

Union Bank of India

7.30% per annum

At discretion of the bank

Disclaimer: These details are subjected to changes. Please double check before taking a call.

Eligibility Criteria and Documents Required for E-Mudra Loan

The eligibility criteria and documents required in order to apply for an E-Mudra loan are given below:

Eligibility Criteria 


Age Limit 

18 years to 65 years

Who can Apply

Both new and existing businesses

Where to Apply

Private Sector Banks, Public Sector Banks, , Small Finance Banks, Regional Rural Banks, and Micro Finance Institutions


No need for collateral 

Documents Required 

ID Proof, address proof

How to Apply for an e-Mudra Loan

Any established and new business owner can opt for an e-Mudra loan online from the official website of registered Indian financial institutions that provides this service. 

Furthermore, one can apply for an e-Mudra loan online via Udyami Mitra portal. However, you should keep the necessary documents handy before undergoing this application process. 


The Steps to Apply for an e-Mudra Loan through the Udyami Mitra Portal is as Follows: 

  • Step 1: Go to the Udyami Mitra official website

  • Step 2: Select on “Apply Now” option

  • Step 3: In the next page, click on ‘Category of Borrower’ and select whether you are a new entrepreneur, existing entrepreneur, or self-employed.

  • Step 4: Input your name, contact number, email ID. Select ‘Generate OTP’, and then proceed.

  • Step 5: Insert the OTP that you received on your registered mobile number. By doing so your registration on the Udyami Mudra portal will be completed successfully.

  • Step 6: Fill out professional and personal details on the next page.

  • Step 7: Select the ‘Apply Now’ option under the ‘Loan Application Centre’ option.

  • Step 8: You will get three scheme options: ‘Tarun’, ‘Shishu’, and ‘Kishor’ from which you can choose the scheme that suits you the best. 

  • Step 9: After choosing the scheme, fill out your basic business details.

  • Step 10: Next, provide information of proprietors and directors, basic information related to the business, existing credit facilities, estimated working capital, credit report, etc. 

  • Step 11: Attach documents in .jpg, .bmp, png, or pdf format and make sure that its size is in between 250 kb and 5 MB. 

  • Step 12: After entering all information select ‘Submit’ .

  • Step 13: Lastly, you will be redirected to the declaration page where you have to tick the necessary checkboxes in order to complete the application process.

After completing all these steps successfully, you will get a notification with a loan application ID that you have to keep for future requirements.


Now that you have gone through the steps to apply for an E-Mudra loan online, take a look at its eligibility criteria and documents required.  

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Benefits of Availing an e-Mudra Loan

The benefits of availing an e-Mudra loan are:

  • An entrepreneur does not have to furnish any guarantee to avail an e-Mudra loan.

  • An established or an aspiring business owner can avail up to ₹10 Lakhs as an e-Mudra loan.

  • As e-Mudra loans can be availed online, it saves time.

  • If the amount borrowed through an e-Mudra loan is under or equal to ₹5 Lakhs, many institutions do not charge a processing fee at all.

  • The borrower can repay the e-Mudra loan over the course of five years, subject to personal eligibility and the loan size.

  • Several banks and financial institutions offer e-Mudra loans to eligible applicants at affordable interest rates.

  • The amount available as e-Mudra loan can be used for things such as starting a business, expanding a venture, giving the establishment an overhaul or meeting working capital requirements during months of low turnover.

  • The eligibility criteria that one needs to fulfil to qualify for an e-Mudra loan is simpler as compared to the conditions an entrepreneur must satisfy to get a regular business loan.

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Top 3 Public Sector Banks Offering e-Mudra Loans

The top 3 public sector banks that offer e-Mudra loans on the basis of the loan amount disbursed in FY 2020-21 are:

Bank Name

E-Mudra Loan Product Name

Amount Disbursed in FY 2020-21 (In ₹ crores)

State Bank of India (SBI)

SBI e-Mudra Loan


Canara Bank

Online MSME Loan


Punjab National Bank (PNB)

PNB e-Mudra Scheme


Who Can Apply for an E-Mudra Loan

Following are the persons who can apply for the E-Mudra Loan.

  • Both new and existing units can opt for the Pradhan Mantri Mudra Yojana loan.

  • Business sectors involved in producing goods can opt for this loan.

  • Individuals employed in the trading and services sector may opt for this loan. 

What Purpose Can the MUDRA Loan be Utilised for

The following sectors' MSME entrepreneurs are eligible for the MUDRA loan:

  • Transport Vehicles: Purchase of transport vehicles such as small goods transport vehicles,  e-rickshaws, auto rickshaws, three-wheelers, taxis, etc. for the movement of passengers and products. A tractor, tractor trolley, or power tiller that is only utilised for business operations is also eligible for PMMY aid. Two-wheelers utilised for business purposes are also covered by the PMMY.

  • Personal, Social, and Community Services: Salons, fitness centres, boutiques, tailor shops, dry cleaners, repair shops for bicycles and motorcycles, DTP and photocopying facilities, drugstores, courier services, etc.

  • Food Products Sector: This includes businesses providing daily catering / canteen services, cold chain trucks, cold storages, ice producing units, ice-cream making units, and biscuit, bread and bun manufacturing, as well as agricultural produce preservation at the rural level.

  • Textile Products Sector/Activity: Handloom, power loom, Khadi, chikan, zari, zardozi, traditional embroidery and hand work, traditional printing and dyeing, apparel design, cotton ginning, knitting, computerised embroidery, stitching, and other textile non-garment products like bags, vehicle accessories, furnishing accessories, etc.

  • Commercial loans for Traders and Shopkeepers: Financial assistance for financing to people for their retail stores, trade and business ventures, service businesses, and non-farm income generating ventures with beneficiary loan sizes of up to ₹10 Lakhs per enterprise or borrower.

  • Equipment Finance Scheme for Micro Units: Creating micro businesses by acquiring the appropriate tools and equipment with a loan amount per recipient of up to ₹10 Lakhs.

  • Agriculture-related activities: Agriculture-related activities include pisciculture, beekeeping, poultry, grading, livestock-rearing, sorting, and agro industries, as well as dairy, fishing, agri-clinics, agribusiness centres, food and agro-processing, etc. (crop loans, land improvements like canals, irrigation, and wells are excluded from this), services that help them and foster livelihood or generate income are qualified for coverage under the PMMY in 2016–17.

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Products Offered Under the PMMY Scheme

The products offered under the Pradhan Mantri Mudra Yojana (PMMY) scheme are:

Product Name

Loan Amount Range

Repayment Tenure

Interest Rate (per annum)

Processing Fees

Margin Money Requirement


Up to ₹50,000

Between 6 months and 12 months

From 8.40% 




Between ₹50,001 to ₹5,00,000

Between 12 months and 36 months

From 8.40% 


10% of the principal amount


Between ₹5,00,00 to ₹10,00,000

Between 12 months and 60 months

From 8.40%

0.50% of the loan amount + GST

10% of the principal amount

FAQs on e-Mudra Loans

One can gain access to an e-Mudra loan through the official websites of registered banks/NBFCs. Alternatively, one can also apply for an e-Mudra loan through the Udyami Mitra Portal.


No. There is no need for any kind of collateral in order to avail an e-Mudra loan.


Depending on the loan amount, the repayment timeline for an e-Mudra loan can be anywhere between 12 months to 60 months.


A Mudra card is a debit card that is issued to a Mudra loan borrower against their loan account. This card is used to make withdrawals from the working capital portion of the sanctioned amount. A Mudra card also allows the borrower to make frequent credits into their loan account to reduce the interest burden by directly paying the principal component of the loan.


There are various non-credit challenges or constraints that the NBFCs face, which includes knowledge gaps, skill development gaps, information asymmetry, business or financial illiteracy, and lack of growth orientation. In the future, MUDRA intends to implement a credit-plus approach and provide Developmental and Support services to the target demographic in order to address these limitations. It will play the role of a market maker and create an ecosystem with the capacity to provide value in an effective and long-lasting way.


Bandhan Bank is the private sector bank that topped the charts in FY 20-21 in terms of Mudra loan disbursal. During that financial year, Bandhan bank disbursed ₹32,335 Crores by way of Mudra loans.


The e-mudra scheme introduced by the Pradhan Mantri Mudra Yojana (PMMY) doesn’t offer any subsidies for availing loans. However, it offers credit with flexible and easier terms to small businesses through banks as well as financial institutions.


To download the e-mudra loan application form, simply visit the PMMY official website. Now, download the form depending on whether you require a loan under the Shishu, Tarun, or Kishore scheme.


The e-Mudra PMMY scheme provides a loan to micro, small, medium, non-farming and non-corporate business enterprises situated in rural as well as urban areas in India. To become eligible for the scheme, you should be: 

  • An Indian citizen

  • A small-scale manufacturer

  • A vegetable and fruit vendor 

  • An artisan

  • A retailer/ shopkeeper 

  • An individual engaged in agriculture, including poultry, livestock units, fisheries.

Yes, it is easy to avail an e-mudra loan, provided you fulfil the required criteria. Moreover, you do not need to submit any collateral for getting this loan. The loan is available for both new as well as existing MSMEs.


Once you avail a MUDRA loan, your credit report will include that information. So, if you apply for another loan from some other lender, they will come to know that you have already taken a MUDRA loan somewhere else. So, the lender is most likely to disapprove of your application.


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