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What is Mudra Loan?

By November 2019, close to 10 lakh crore loans have been sanctioned under Pradhan Mantri Mudra Yojana, which was launched in April 2015. It offers three kinds of loans:

  • Shishu loans upto ₹50,000 to individuals in the early stage of business

  • Kishore Loan - Loans between Rs. 50,000 and Rs. 5 Lakhs

  • Tarun Loan - Loans between Rs. 5 lakhs and Rs. 10 Lakhs

What is the Mudra Loan (PMMY) eligibility criteria?

Mudra loans extends loans to non-corporate, non-farming micro, small and medium enterprises (MSMEs) in rural and urban India. You are eligible for PMMY scheme if you are:

  • Small manufacturer

  • Artisan

  • Fruit and Vegetable Dealer

  • Shopkeeper

  • Individual occupied in Agriculture

MUDRA loans can be availed from any participating banks, NBFCs (Non-Banking Financial Institutions) or MFIs (Micro Finance Institutions).

Lending Institution that are Eligible to provide Mudra Loan

Anyone who runs a small business enterprise is eligible to apply for Mudra (Micro Units Development and Refinance Agency). The purpose of Mudra Loan is to support the small scale businesses that don't have access to a formal channel of lending funds for their business. All public, private and regional rural banks are eligible to provide Mudra Loan.

Given below are the lending institutions that offer Mudra loan:

  • Non-banking Financial Companies (NBFCs)

  • Public and Private Sector Banks

  • Micro Finance Institutions (MFIs)

  • Regional Rural Banks (RRBs)

  • Small Finance Banks (SFBs)

These institutions would be known as MUDRA loans under the PMMY (Pradhan Mantri MUDRA Yojana). The lending institution also needs to make sure it fits in the eligibility criteria in order to be eligible for MUDRA Loan. They are as follows:

  • To be eligible the bank must have generated profits during the last two years.

  • For public, private and regional rural banks the net performing assets should not exceed more than 15%, 10% and 6%.

  • The net worth of the lending institution should be above Rs. 250 crore for private and public sector banks and above Rs. 50 crore for rural banks.

Altogether, 27 Public Sector Banks, 31 Regional Rural Banks, 17 Private Sector Banks, 36 Microfinance Institutions, 25 Non-Banking Financial Institutions and 4 Co-operative banks have been selected for Mudra loan.

Food Product Business that Comes Under Mudra Loan Eligibility

 Mudra loan (PMMY) eligibility is extended to the following businesses in food and allied industry:

  • Units making pickles, papads, jams and ice-creams

  • Bakeries, sweet shops, food stalls, canteen or catering facilities

  • Cold storages or agricultural produce preservation centres

Agriculture Business that Comes Under Mudra Loan Eligibility

A business that generates its income from activities below qualifies for MUDRA scheme loan:

  • Poultry, fisheries and livestock units

  • Pisciculture and beekeeping facilities

  • Agriclinics and agribusiness centres

Non-Farm Business that Comes Under Mudra Loan Eligibility

Absolutely. Enterprises involved in sectors other than farming can also avail loan under the Pradhan Mantri Mudra Yojana. These include:

Textile industries such as:

  • Chikankari, zardozi and other hand or computer embroidered units

  • Units running a powerloom or handloom facility, knitting or fabric dyeing and printing

  • Facilities producing accessories such as bags, furnishings etc

Businesses providing services to a community or society:

  • Beauty parlours and salons

  • Gymnasiums and health and fitness centres

  • Tailoring shops and boutiques

  • Motorcycle, car, scooter or cycle repair shops

  • Dry cleaning shops

  • Photocopy shops or internet cafes

  • Medical shops and courier agencies


Can you avail a MUDRA loan to buy vehicle or taxis for transportation of goods?

Loans as per the MUDRA scheme are available to those looking to purchase a taxi, passenger car, or a vehicle to transport small goods or even an auto rickshaw.

Those who qualify under the aforementioned criteria can easily avail loans of up to Rs. 10 lakhs. However, if you are looking for a higher loan amount with quick approval and disbursal from a trusted lender, look no further than Bajaj Finserv business loans available on Finserv MARKETS.

Be it start-ups looking for new-age instructure or a small and medium enterprise looking to upgrade machinery, you can find a business loan of up tailored to your needs on Finserv MARKETS. Convenient online process, zero collateral, flexible repayment options, high loan amount of upto ₹30 lakhs, loan disbursal in less than 3 minutes along with exclusive offers make the Bajaj Finserv business loans on Finserv MARKETS all the more attractive.

Mudra Loan Eligibility Related FAQs

  • ✔️What is the maximum loan amount that can be availed by a borrower under the MUDRA scheme?

    The structure of the MUDRA loan is mentioned as below:

    • Sishu Loans – Rs. 50,000
    • Kishor Loans- Rs. 5,00,000
    • Tarun Loans – Rs. 10,00,000

    Therefore, the maximum loan amount that you can avail Under the MUDRA scheme is Rs. 10, 00,000.

  • ✔️Can MUDRA loans be availed for the purchase of goods vehicles or taxis?

    Yes, MUDRA loan amount can be used for purchasing transport vehicles or taxis used for commercial purposes only.
  • ✔️Who is eligible for Mudra loan?

    All small businesses can benefit from the MUDRA loan scheme. Traders, manufacturers, service providers, self-help groups, artisans, and even those who are working at lower levels are eligible beneficiaries of for the MUDRA loan.
  • ✔️What are the documents required for Mudra loan?

    The documents required for MUDRA loan are mentioned below:

    • MUDRA Loan Application with self-attested identity proof of loan applicant and 2 passport size photographs.
    • Loan application prescribed by the lender seeking information about the applicant, past financial results and profile of the activity proposed
    • Details of suppliers, and types of machinery to be purchased for the activity proposed.
    • Identity of business ownership and business address.
    • Copies of necessary licenses and certificates to carry out the trade or activity for which the finance is availed.
  • ✔️How can I apply for Mudra loan?

    You can apply for MUDRA loan online with the help of banks and NBFCs registered under this scheme. Public and private sector banks, small banks, rural banks, scheduled banks, NBFCs, and co-operative societies approve and disburse MUDRA loans
  • ✔️What is Mudra loan interest rate?

    The interest rate on Mudra Loan doesn’t exceed 1.00% per month and is largely dependent on the base lending rates of financing institutions.

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