Mudra Loans

The Pradhan Mantri Mudra Yojana provides MUDRA Loans (PMMY). MUDRA is an acronym that 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.

MUDRA stands for Micro Units Development and Refinance Agency.

Pradhan Mantri Mudra Yojana (PMMY) or Mudra loans is a scheme launched in the year 2015 to provide loans of up to Rs 10 lakh to non-farm, non-corporate small or micro-enterprises. The intent of introducing this scheme was to make available easy business loans for small and micro enterprises, as they find it difficult to raise loans.

  • These loans can be availed either to start a business or for business expansion.
  • Since its inception, Rs 12 lakh crore worth loans have been disbursed under PMMY.

List of Businesses under the Mudra Scheme

The following businesses are covered by the Mudra scheme to perform income-generating activities:

Mudra Loan Product Types

Mudra loan schemes are classified into three types: Tarun, Kishor, and Shishu. 




Up to Rs.50,000


Rs.50,000 to Rs.5 lakh


Rs.5 lakh to Rs.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:

Activities Covered Under Mudra Loan

The following are the activities that are covered by the Mudra Loan:

How Do You Apply for a Mudra Loan? 

The application form is available at, where you can download it and fill in all of the required information. Different banks' application processes may differ slightly. You must go to the nearest branch of the desired bank and submit the duly completed application form, as well as complete the bank formalities.

You can also apply online on the bank's official website by submitting the duly completed application form along with the lender's specified documents. Once the lender is satisfied with the submitted documents, the loan will be approved and the loan amount will be deposited into your specified bank account within 7-10 working days.

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

Eligibility for Mudra Loans

Mudra loan is 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 age of eligibility

18 years

Maximum age of eligibility

65 years

Who can avail of a Mudra Loan

Loans can be availed by new and existing units

Security or collateral

No collateral or third-party security is required

Institutions eligible to offer Mudra Loan

Public Sector Banks, Private Sector Banks, Micro Finance Institutions, and Regional Rural Banks

Documents required

Proof of identity, proof of residence, application form and passport size photos

What is the Mudra loan interest rate?

The interest rate for a Mudra loan is determined by the applicant's profile. MUDRA loans are available from a number of banks in both the public and private sectors. 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 requirements. 

Documents Required for Mudra Loan Application

The following documents are required for a MUDRA loan:


Type Documents

Application Form

Duly filled up an application form on the basis of the loan category

Proof of Identity

Aadhaar card, Voter’s ID card, driving license, passport, etc.

Proof of Address

Utility bills (electricity bills, telephone bills, and so on), Aadhaar cards, Voter’s ID cards, passport, etc.


2 passport-sized photographs of the applicant

Caste Certificate

If applicable

Other documents

Quotation of the commodity or items which are to be bought and used for the business

The Advantages of Taking a Mudra Loan

The following are the key features and benefits of a Mudra loan:

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:

Women Entrepreneurs Can Get Mudra Loans

Mudra Yojana under PMMY encourages women's entrepreneurship by providing collateral-free business loans at reduced or concessional interest rates to private and public sector banks, NBFCs, and Micro Finance Institutions (MFIs). 

The maximum loan amount available under the Mudra Yojana for female entrepreneurs is Rs. 10 lakh, with a repayment period of up to 5 years. Mudra loan eligibility for women is the same as it is for individuals and businesses. For women entrepreneurs, nil to nominal processing fees and foreclosure fees are charged on the sanctioned loan amount.

Mudra Loan Related FAQs

Mudra Loans are a type of term loan in which a group or an individual can obtain funds for business expansion, inventory purchases, and other purposes.

The maximum loan amount that can be obtained from a bank is Rs.10 lakh.

Yes, if you want to apply for a Mudra Loan, you must provide your income tax returns (ITR) for the previous two years.

No, if you want to apply for a Mudra Loan, your Cibil Score will not be considered.

MUDRA loans are aimed at the Non-Corporate Small Business Segment, which includes millions of partnership firms and sole proprietorships in both urban and rural areas that operate as service sector units, small industries, small manufacturing units, vegetable or fruit vendors, repair shops, and so on.

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