Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched by the Government of India in 2015 to provide loans up to ₹10 lakh to small and micro businesses. These loans are given through banks, rural banks, and other financial institutions. People can apply either by visiting a bank or through the official website. Banks usually ask for security (collateral) for loans. But many small businesses cannot provide it. To support them, the Government of India launched the Pradhan Mantri MUDRA Yojana (PMMY), which provides collateral-free business loans.

According to this scheme, you can apply for loans up to ₹20 lakh without providing any security. In this blog, we will cover MUDRA Yojana details, eligibility, subsidy, bank list, and application process.

What is Pradhan Mantri MUDRA Yojana (PMMY)?

Pradhan Mantri MUDRA Yojana is a government scheme launched in 2015 to help small and micro businesses by providing loans without security.

These loans are available through banks, NBFCs, and microfinance institutions. The goal is to support entrepreneurs and help them grow their businesses with easy and quick access to funds.

Purpose of MUDRA Loans

MUDRA loans can be used for different business needs, such as:

• Managing working capital
• Purchasing equipment and machinery
• Buying transport vehicles
• Supporting businesses like food, textile, and trading
• Funding agricultural activities like poultry and beekeeping

Benefits of MUDRA Loan

• No security required to get the loan
• Easily available for small business owners
• Quick access to funds without much delay
• Special benefits for women entrepreneurs
• Available in both rural and urban areas
• Flexible repayment options
• Different credit options like working capital and equipment loans
• MUDRA card for easy access to funds

Types of Loan Categories PMMY : Shishu, Kishore, Tarun, and Tarun Plus

PMMY loans are grouped into different categories depending on the stage and needs of the business. The main types are:

1. Shishu Mudra Loan

Shishu Mudra Loan gives up to ₹50,000 to people who want to start a new business or are in the early stage. You may need to give details of the machines or equipment you will use. This category is for new businesses such as street vendors, small shop owners, home based workers, and service providers. It helps cover basic expenses such as buying raw materials, stock, equipment, or opening a shop or stall.

2. Kishor Mudra Loan

This loan offers up to ₹5 lakh to businesses that need extra money to expand. Applicants may need to submit a report about their business plan and growth. It can be used to buy equipment, hire employees, manage working capital, or grow the business.

3. Tarun Mudra Loan

Under this scheme, Tarun loans provide up to ₹10 lakh to businesses that meet the eligibility criteria. This fund can be use to buy machinery, set up new units, enter new markets, or increase production.

4. Tarun Plus Mudra Loan

Tarun Plus Loan gives ₹10 lakh to ₹20 lakh to business owners who have already repaid their Tarun loan. This category was introduced in the Union Budget 2024–25. This loan helps big businesses grow more and increase production.

Eligibility Criteria for MUDRA Loan

MUDRA Loan Eligibility:

• Age should be between 18 to 65 years
• Can be an individual or business (shop, company, partnership, etc.)
• Must have a business plan or already running a small business
• Business should be non-farming (like trading, service, or manufacturing)
• Loan amount should be less than ₹20 lakh
• Shop owners, vendors, small business owners, and service providers can apply
• Farming is not allowed, but related activities like food processing can apply

Businesses Covered under MUDRA Loans

MUDRA loans can be used for different types of small businesses, including:

1. Transport Vehicles: MUDRA loans can be used to buy vehicles for transport, such as auto rickshaws, taxis, e-rickshaws, and small goods vehicles. It also covers tractors, power tillers, and two-wheelers used for business purposes.
2. Community, Social & Personal Services: MUDRA loans are available for service businesses like salons, gyms, boutiques, photocopy shops, tailoring, dry cleaning, medical shops, repair shops, and courier services.
3. Food Business: MUDRA loans are available for food businesses like making papad, biscuits, bread, jams, ice cream, and pickles. It also includes food stalls, catering services, cold storage, and sweet shops.
4. Textile Business: MUDRA loans are available for textile businesses like handloom weaving, embroidery, stitching, dyeing, and garment design. It also includes making products like bags, accessories, and fabrics.
5. Loans for Shopkeepers and Traders: MUDRA loans are available for people who run shops or are involved in trading and service businesses.
6. Equipment Finance for Micro Businesses: MUDRA loans help individuals buy machinery or equipment needed to start or grow their small business.
7. Agriculture Support Work: MUDRA loans are available for activities like poultry farming, dairy, fishery, beekeeping, and food processing. However, farming and irrigation-related work are not covered under this scheme.

Documents Required for Mudra Loan

To apply for a Mudra loan, you must provide some important documents. These documents support your loan application.

• Identity proof like Aadhaar card, Passport, Voter ID, or Driving License
• Address proof such as utility bills, ration card, or rent agreement
• Business plan explaining how you will use the loan
• Business registration proof like GST or license
• Bank statements or financial documents
• Additional documents if required by the bank

Required Documents for Vehicle Loan under PMMY

When applying for a vehicle loan under the Pradhan Mantri MUDRA Yojana (PMMY), applicants are required to submit a few necessary documents.

• Filled Mudra loan form
• Vehicle loan application form
• Two passport-size photographs
• Identity proof (Aadhaar, Passport, Voter ID, or Driving License)
• Address proof (Aadhaar, electricity bill, phone bill, or bank statement)
• Income proof as required by the bank
• Bank statement for the last six months

How to Apply for MUDRA Loan Online?

You can apply for a Mudra loan both online and offline.

Steps to apply through banks or NBFCs:

• Select the right loan category for your business
• Visit any bank or NBFC branch
• Fill out the PMMY application form
• Attach all required documents
• Submit the form to the bank or NBFC
• After approval, the money will be sent to your bank account

Steps to Apply Online for Mudra Loan:

• Select the loan category (Shishu, Kishore, Tarun, or Tarun Plus)
• Visit the official website of a MUDRA-approved bank or NBFC
• Fill in the application form with business details, loan purpose, and amount
• Upload required documents like ID proof, address proof, business registration, bank statements, and equipment details (if needed)
• The bank will verify your documents and check your credit profile
• After approval, money will be sent to your account
• You may also receive a MUDRA Card for easy transactions

Banks and NBFCs offering MUDRA Loan

Here are some banks and financial institutions in India where you can apply for Mudra loans:

1. State Bank of India (SBI)
2. Punjab National Bank (PNB)
3. Bank of Baroda (BOB)
4. Canara Bank
5. Union Bank of India
6. Indian Overseas Bank (IOB)
7. Bank of India (BOI)
8. Central Bank of India
9. Axis Bank
10. ICICI Bank
11. HDFC Bank
12. Kotak Mahindra Bank
13. IDBI Bank
14. Yes Bank
15. Federal Bank
16. UCO Bank
17. Andhra Bank
18. Vijaya Bank
19. Corporation Bank
20. Indian Bank
21. Bajaj Finserv
22. Bank of Maharashtra
23. IDFC First Bank
24. Lendingkart Finance
25. Karnataka Bank
26. Syndicate Bank
27. Saraswat Bank
28. Tata Capital

Mudra Loan Interest Rate

The interest rate for Mudra loans starts at around 8% per year. Women entrepreneurs can get a small discount in interest rates (about 0.25%) when taking loans through MFIs or NBFCs.

Conclusion

Pradhan Mantri MUDRA Yojana (PMMY) is a very helpful scheme for small business owners and entrepreneurs in India. It provides easy access to loans without any collateral, which makes it easier for people to start or grow their businesses. With different loan categories like Shishu, Kishore, Tarun, and Tarun Plus, the scheme supports businesses at every stage. The simple application process, flexible repayment options, and wide bank support make it a reliable option for funding. Overall, MUDRA loans help promote self-employment, boost small businesses, and support economic growth in the country.

Frequently Asked Questions (FAQs)

1. What is Pradhan Mantri MUDRA Yojana (PMMY)?

PMMY is a government scheme that provides collateral-free loans to small and micro businesses to support their growth and development.

2. What is the maximum loan amount under the MUDRA scheme?

Under the MUDRA scheme, you can get a loan up to ₹20 lakh depending on the category (Shishu, Kishore, Tarun, or Tarun Plus).

3. Do I need to provide collateral for a MUDRA loan?

No, MUDRA loans are collateral-free, which means you do not need to provide any security to get the loan.

4. Who can apply for a MUDRA loan?

Individuals, shop owners, small business owners, service providers, and companies involved in non-farming activities can apply.

5. What are the types of MUDRA loans?

There are four types:

• Shishu (up to ₹50,000)
• Kishore (up to ₹5 lakh)
• Tarun (up to ₹10 lakh)
• Tarun Plus (₹10 lakh to ₹20 lakh)

6. What is the interest rate for MUDRA loans?

The interest rate usually starts from around 8% per year. Women entrepreneurs may get a small discount.

7. Can I apply for a MUDRA loan online?

You can apply for the loan online through bank or NBFC websites, or offline by visiting a bank branch.

8. What documents are required for a MUDRA loan?

You need identity proof, address proof, business plan, business registration documents, and bank statements.

9. How long does it take to get a MUDRA loan?

The time depends on the bank, but generally, after document verification and approval, the loan is disbursed within a few days.

10. What can a MUDRA loan be used for?

MUDRA loans can be used for starting or expanding a business, buying equipment, managing working capital, purchasing vehicles, and supporting small business activities.