Mudra Shishu Loan

The government has made it so that the Shishu loan is available without any processing fees to help small businesses and entrepreneurs access credit for their working capital needs without much effort.

• Affordable interest rates, generally not exceeding 12% p.a.

Interest rates will be charged in accordance with the bank’s policy. However, the interest rates will be nominal as this is a government-backed scheme. RRBs, scheduled commercial banks and cooperative banks that wish to avail of refinance from Mudra will have to peg their interest

rates, in accordance with the advice offered by MUDRA Ltd., periodically.

• Repayment tenure of 3 to 5 years

Depending on the loan category you choose, bank policies, your creditworthiness, business’ profitability and other features, you can get a repayment tenure of up to five years. This will give you ample time to meet your financial obligations and repay them. 

• Online as well as in-person application process

Depending on your preference, you can choose to apply for the Shishu loan through the online mechanism or the offline mechanism. Many banks also offer fully digitalised and paperless application processes. 

• Loan amount of up to ₹50,000

Under the Shishu loan category, you can get a loan of up to ₹50,000 to meet your working capital requirements. 

2. Other Financial Documents

• Income Proof: Latest salary slips, Income Tax Returns, or Form 16

• Address proof of the business

• Registration certificate of the business

• Proof of business continuity

• Director Identity Number (DIN) of all the directors of the firm, if applicable

• Photographs of the applicant(s)/director(s) or all of the partners

• Income tax returns of the past 2 years

• Bank statements of the past 12 months

• Sales records of the current financial year

• Assets and liabilities statement of the firm

• Memorandum of Association (MOA) or Articles of Association or the deed of partnership

• Relevant registrations and permits in the name of the business with the concerned authorities

3. Eligibility Criteria 

Here are some parameters that you’d have to meet to be eligible for availing a Shishu Mudra loan: 

• If you’re between the ages of 18 and 65. 

• If you require a loan of up to ₹50,000 to fund your working capital needs. 

• If you already own a business and are looking to develop or modernise your existing venture, you may take a Shishu Mudra loan. 

• If you’re an Indian citizen with no criminal records.

• If you do not have any history of defaulting on loan payments with any other banks 

• If you’re a micro entrepreneur, you may avail a Shishu Mudra loan. 

• If you’re a new business owner or startup founder looking to fund your business, you may apply for the Shishu Mudra loan. 

• If you’re engaged in any of the following sectors, you may avail a Shishu Mudra loan:

  1. Manufacturing sector

  2. Trading and services sector

  3. Allied agricultural services sector