Pradhan Mantri Mudra Yojana (PMMY)
The Pradhan Mantri Mudra Yojana provides MUDRA Loans (PMMY). MUDRA is an abbreviation for Micro-Units Development and Refinance Agency. Borrowers can apply for business loans ranging from Rs.50,000 to Rs.10 lakh under this scheme based on the Sishu, Kishor, and Tarun categories.
The Pradhan Mantri Mudra Yojana provides MUDRA Loans (PMMY).The acronym MUDRA stands for Micro-Units Development and Refinance Agency. Borrowers can apply for business loans ranging from Rs.50,000 to Rs.10 lakh under this scheme based on the Sishu, Kishor, and Tarun categories.
What exactly is the Pradhan Mantri Yojana?
The Pradhan Mantri Yojana was launched in 2015 with the goal of assisting small businesses in expanding and succeeding. Companies from both the profit and non-profit sectors can apply for a loan under this scheme, with a loan amount of up to Rs.10 lakh available to help them get started.
The following companies are eligible for a loan under the Pradhan Mantri Yojana scheme:
• RRBs (Railway Recruitment Boards)
• Institutions of Microfinance (MFIs)
• Banks, commercial
• Financial Corporations That Aren’t Banks (NBFCs)
• Small Finance Institutions
The following industries are eligible for loans under the Pradhan Mantri Yojana scheme:
• Commercial vendors
• Shopkeepers
• Agriculture industry
• Food manufacturing industry
• Handicraftsmen
• Small-scale producers
• Self-employed business owners
• Shops for restoration and repair
Types of Mudra Loan Products
Mudra loan schemes are classified into three types: Tarun, Kishor, and Shishu.
Name of Scheme | Loan of Amount |
Shishu | Up to Rs. 50,000 |
Kishor | Rs. 50,000 to 5 Lakh |
Tarun | Rs. 5 Lakh to 10 Lakh |

What is the purpose of the Pradhan Mantri Mudra Loan?
Yojana MUDRA loans can be used for a variety of purposes, including job creation and income generation. The following are the primary reasons why Mudra loans are obtained:
- Business loans for shopkeepers, traders, vendors, and other service-related activities Equipment financing for small business units
- MUDRA cards are used to obtain a working capital loan.
- Loans for transportation vehicles
- Agri-allied non-farm income-generating activities such as poultry farming, beekeeping, pisciculture, and so on are eligible for a Mudra Loan.
- People who use tractors, tillers, or two-wheelers for commercial purposes are eligible for a Mudra Loan.
- Mudra Loan-covered Activities
The following are the activities that are covered by the Mudra Loan:
• Transport vehicles used for both goods and passengers in the food products sector
• Community, Social, and individual service activities
• Shopkeeper and trader business loans
• Textile industry and activities
• Agriculture-related pursuits
• Micro Units Equipment Financing Scheme
How Do You Apply for a Mudra Loan?
Step 1: Make sure all necessary documents are on hand. The main documents you’ll need are proof of identification, proof of address, and proof of business.
Step 2: Go to a lender who is part of the MUDRA scheme and fill out an application form.
Step 3: Submit the required documents. How to Apply for a Mudra Loan through the Internet
Go to the official website of the financial institution where you want to apply for a Mudra Loan.

Online Mode:
- Download the application form for the scheme you want to participate in – Shishu, Kishore, or Tarun.
- Once you’ve downloaded the form, print it out and fill it out. Check that all of the information on the documents is correct.
- Attach all required documents to the application form and submit it to the branch of the lender from whom you are obtaining the Mudra Loan.
- The lender will verify all of your documents after you have submitted them. If all of the information is found to be correct, the loan will be disbursed to your bank account.
Offline Mode:
- Visit the branch of the lender where you want to get the Mudra Loan.
- Make sure you have a written business plan with you because it will play a significant role in the bank’s decision to grant you a Mudra Loan.
- Choose the scheme under which you want to apply for the Mudra Loan based on your eligibility criteria and fill out the application form.
- Submit the application form, along with any other necessary documents and passport-sized photographs.
- The lender will then review the documents you submitted. If all of your information is correct, the loan amount will be transferred to your bank account.
Eligibility for MUDRA Loans
Mudra loans are available to Indian citizens who have their own business plans for the service sector, trading, or manufacturing activities and require amounts of up to Rs.10 lakh. It is available from public and private sector banks, regional rural banks, small finance banks, and microfinance institutions (MFIs).
An applicant for a MUDRA Loan must meet the following criteria:
- Minimum eligibility age
- 18 years old
- The maximum eligibility age is 65 years.
- Mudra Loans are available to both new and existing businesses.
- Collateral or security
- There is no need for collateral or third-party security.
- Mudra Loan institutions include public sector banks, private sector banks, microfinance institutions, and regional rural banks.
What is the MUDRA loan interest rate?
The interest rate for a Mudra loan is determined by the applicant’s profile. MUDRA loans are accessible from a variety of banks, both public and private. All lenders follow certain guidelines, and the final rate of interest at which a loan is provided to an applicant is determined by the lender. This is done after thoroughly reviewing the applicant’s business requirements002
Documents Required for MUDRA Loan Application
The following documents are required for a MUDRA loan:
Document Type
1. Form of Application: Application form duly completed based on the loan category
2. Identity Documentation: Aadhaar card, voter ID card, driver’s license, passport, and so on.
3. Proof of Address: Utility bills (electricity bills, telephone bills, etc.), Aadhaar cards, Voter ID cards, passports, etc.
4. Photographs: 2 applicant passport-sized photographs
5. Caste Certificate: If applicable
6. Additional Documents:Quotation for the commodity or items to be purchased and used in the business. The Advantages of Taking a MUDRA Loan
The following are the key features and benefits of a Mudra loan:
- Both rural and urban areas have access to banking and financial services.
- Micro-small businesses and start-ups can obtain financial assistance.
- Small-dollar business loans with low interest rates are available.
- The government assumes the borrower’s credit guarantee, so if the borrower is unable to repay the amount borrowed, the government will bear the loss.
- Food vendors, shopkeepers, and other small business owners can benefit from this program.
- This scheme provides financial assistance in areas where people do not have access to basic banking services.
- The scheme’s repayment period can last up to seven years.
- Women borrowers can get the loan at a lower interest rate.
- Refinance programs are also available through designated lenders.
- The Micro Credit Scheme is available to individuals who want to generate income through micro enterprise activities.
- The Mudra loan scheme works in tandem with the government’s “Make in India” campaign, which aims to foster innovation, facilitate investment, improve skill development, and build the best manufacturing infrastructure in the country.
- This scheme does not require any collateral or security.
- The funds borrowed under this scheme can only be used for commercial purposes.
According to the Atmanirbhar Abhiyan, the most recent benefits are available under the Mudra Shishu Category.
The Indian government recently announced that the Mudra Shishu category will be eligible for certain benefits under the Atmanirbhar Abhiyan.
Borrowers in the Mudra Shishu category will be eligible for relief of up to Rs.1,500 crore.
Mudra Shishu borrowers will receive an interest subsidy of Rs.1,500 crore.
The Government of India will provide a 2% interest rate reduction to Fast recipients for a period of one year.
Mudra Loan Information
The Mudra loan scheme has a near-100 percent disbursement rate.
Almost all disbursements under the Pradhan Mantri Mudra Yojana (PMMY) scheme have been completed in the first seven months of the current fiscal year. Private lenders, public lenders, small finance banks, and NBFCs have disbursed Rs.1.11 lakh crore of the Rs.1.17 lakh crore.On April 8, 2015, the Prime Minister announced the scheme. The scheme’s primary goal is to provide credit to microentrepreneurs. Tarun, Kishore, and Shishu are the three types of loans available under the scheme.
MUDRA-covered small businesses will receive interest subsidies.
Small businesses that have been impacted by the coronavirus outbreak, which has made it difficult for them to pay their EMIs on time, will receive a 2% interest subsidy for a year. However, the benefit will only be available for MUDRA-Shishu loans, with a maximum loan amount of Rs.50,000. The benefit will also be available only to prompt payers. Previously, the Reserve Bank of India (RBI) imposed a loan moratorium. Currently, the MUDRA-Shishu portfolio is worth Rs.1.62 lakh crore. MUDRA-Shishu loanees will receive relief worth Rs.1,500 crore as a result of this benefit. On May 14, the Finance Minister made the announcement.
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