Mudra Loan Scheme: Eligibility, Benefits,and How to Apply
Apply for the Mudra Loan Scheme under Pradhan Mantri Mudra Yojana (PMMY). Learn about eligibility, focus areas, loan categories and documents required for Mudra loan in this comprehensive guide.
What is the Mudra Loan Scheme?
The Mudra Loan Scheme is designed to offer financial assistance to micro-enterprises and small businesses that need capital to start or expand their ventures. Under this scheme, businesses can avail of a mudra loan for new business or existing operations up to ₹20 Lakhs without the need for collateral security.
The scheme is implemented under the Pradhan Mantri Mudra Yojana (PMMY), which categorizes the loan into three main stages based on the business lifecycle. The mudra loan is extended by Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks and NBFCs.
The scheme provides a without security business loan for non-corporate, non-farm micro and small enterprises (MSEs) in various sectors like trading, manufacturing and services.
Mudra Loan Categories & Key Benefits
Shishu
Loans up to ₹50,000 for new businesses in the initial stage.
Kishore
Loans between ₹50,001 and ₹5 Lakhs for businesses that have started but need more funds for growth.
Tarun
Loans between ₹5 Lakhs and ₹20 Lakhs for established businesses looking to scale up significantly.
No Collateral Required
It is a pure without security business loan, meaning no risk to your personal assets.
Affordable Capital
Offers competitive interest rates compared to private moneylenders.
Credit for New Business
One of the few schemes offering a mudra loan for new business without a long track record.
Mudra Loan Scheme Eligibility
To ensure your mudra loan application is successful, you must meet the following mudra loan scheme eligibility requirements. This scheme is specifically for micro and small entities.
Business Type
Private Limited Company, LLP, Partnership, or Sole Proprietorship.
Citizenship
Applicant must be an Indian citizen with a valid business idea.
Business Age
Startups or businesses should ideally be less than 7 years old.
Annual Revenue
Annual turnover should generally not exceed ₹25 Lakhs.
Credit History
Must not be a defaulter to any bank or financial institution.
Business Activity
Non-farm activities in manufacturing, services, or trading.
Documents Required for the Mudra Loan
To ensure your mudra loan application is processed quickly, you must have the following documents ready:
Identity Proof
Aadhaar card, PAN card, or Voter ID
Address Proof
Bank statement, electricity bill, or Aadhaar.
Business Profile
Detailed Project Report (DPR) explaining the product/service.
Business Registration
Udyam Registration and Partnership Deed/Incorporation Certificate.
Financials
Latest ITR, balance sheet and P&L statement (for Kishore and Tarun).
Caste Certificate
If applying under SC/ST/OBC categories for special government grants.
Quotations
Estimates for machinery or items to be purchased with the loan.
How to Apply for the Mudra Loan Scheme
Prepare Your Documents
Compile KYC, business plan, registration and financials as per your loan category.
Visit the Official Portal
Use the Mudra portal or visit an authorized bank / MFI / NBFC branch.
Submit Your Application
Complete the application form and attach required documents.
Loan Review and Approval
The lender evaluates creditworthiness and business viability.
Receive the Loan
On approval, funds are disbursed to your business account.
Prepare Your Documents
Compile KYC, business plan, registration and financials as per your loan category.
Visit the Official Portal
Use the Mudra portal or visit an authorized bank / MFI / NBFC branch.
Submit Your Application
Complete the application form and attach required documents.
Receive the Loan
On approval, funds are disbursed to your business account.
Loan Review and Approval
The lender evaluates creditworthiness and business viability.
Frequently Asked Questions
Need help with your Mudra Loan application?
Contact us for expert consultancy to get the funding you need for your business.