Shishu MUDRA Loan

Shishu Mudra Loan provides collateral-free loans up to ₹50,000 for new and early-stage businesses under PMMY. It is designed for startups and micro-enterprises that need initial working capital. The MUDRA Shishu Loan is one of the loan categories under the Pradhan Mantri Mudra Yojana (PMMY). Enterprises, startups, and individuals running small-scale businesses like shops, service units, or even cottage industries can get loans of up to ₹50,000 to kickstart or expand their operations. You do not have to submit collateral to get the loan, which comes with flexible repayment options.

Zero processing fee

Some banks may impose an upfront charge according to their internal policies.

However, most waive processing or upfront fees for Shishu loans. The government ensures that Shishu loans are available without processing fees, facilitating easier access to working-capital credit for small businesses and entrepreneurs.

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

Interest will be levied according to each bank’s internal policy. 

Yet under this government-backed scheme, rates are expected to remain nominal. Scheduled commercial banks, regional rural banks, and cooperative banks seeking refinance from MUDRA must align their lending interest with periodic guidance issued by MUDRA Ltd.

Repayment period of 3 to 5 years

Based on your chosen loan category, bank policy, your creditworthiness, business earnings and other factors, your repayment period may extend up to five years. 

That duration helps you spread out your repayments and manage your financial commitments more comfortably.

Online as well as in-person application process

You may opt to apply for the Shishu loan either via an online or offline route. Many banks even support completely digital, paperless application processes to simplify and expedite your submission.

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.

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

• If you are between the age 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 MUDRA Shishu 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 or business owner or startup founder looking to fund your business

• If you’re engaged in any of the following sectors:

  1. Manufacturing sector

  2. Trading and services sector

  3. Allied agricultural services sector

Documents Required for Shishu Mudra Loan

Here is the list of documents required to apply for a MUDRA Shishu loan:

1. KYC Documents

Identity Proof

• PAN card

• Passport

• Aadhaar card

• Driving licence

• Voter’s ID
  
  

Address Proof

• Aadhaar card

• Bank account statements

• Ration card

• Rent agreement

• Phone bill

• Power bill
  
  

2. Miscellaneous Financial Documents

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

• Business Address Proof: Address proof of the business

• Business Registration Proof: Registration certificate of the business

• Business Continuity Proof: Proof of business continuity

• Director Identification Details: Director Identity Number (DIN) of all the directors in the firm (if applicable)

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

• Past Income Tax Returns: Income tax returns of the past 2 years

• Bank Statements: Bank statements of the past 12 months

• Sales Records: Sales records of the current financial year

• Assets & Liabilities Statement: Assets and liabilities statement of the firm

• Foundational Business Documents: Memorandum of Association (MoA), Articles of Association, or partnership deed

• Business Permits & Registrations: Permits and registrations issued in the business’s name with relevant governmental authorities

You can easily apply for a MUDRA Shishu Loan for your business online by following the below-mentioned steps:

• Step 1: Visit the Udyami Mitra website and click on “Apply Now”

• Step 2: Enter name, email address and mobile number at the bottom of the page and click on “Generate OTP”. Now enter the OTP received and complete the process by clicking on the ‘Verify OTP’ button

• Step 3: Fill in all personal and professional details on the following page and click on the “Apply Now” button under “Loan Application Center”

• Step 4: Select ‘Shishu’ to apply for a Shishu Loan

• Step 5: Now, you need to enter a few details about your business such as background information of the proprietors and directors of the firm, future working capital estimate, lender of preference, etc

• Step 6: Once the above information has been filled in, click on the ‘Submit’ button. Finally, you will be taken to a declaration page. Tick the appropriate checkbox to continue and complete the application process
  
  

Once you complete your MUDRA Shishu Loan application process, a success message with the loan application number will be displayed on the screen. Note the reference number for future correspondence.
Alternatively, you can also apply for the Shishu loan offline by visiting your nearest branch of the bank you wish to get the MUDRA Shishu loan from. All you need to do is obtain the MUDRA loan application form from a bank official, fill in all the requisite details in the form and attach all the relevant documents and submit the same to the bank official. Once all your documents are verified, your loan shall be approved and the amount shall be disbursed to your bank account.

The MUDRA Shishu Loan scheme is a boon for aspiring entrepreneurs in the country as it gives small loans at affordable interest rates to fulfil any working capital needs. With a MUDRA Shishu loan, you can get a credit of up to ₹50,000 to fund your working capital needs. Once you expand the business to higher levels, you can also consider Kishore and Tarun loans under the MUDRA scheme which offer higher loan amounts and are aimed towards bigger and more established business enterprises.