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PM MUDRA Yojana (PMMY) is a Government of India scheme to provide affordable credit to the micro enterprises engaged in trading, manufacturing and service sectors, including agricultural activities. Micro Units Development and Refinance Agency (MUDRA) is an NBFC, which provides refinance support to RRBs, commercial banks, MFIs, small finance banks, and other NBFCs for lending to micro enterprises. Prospective business loan borrowers can avail MUDRA loans of up to Rs 10 lakh from a nearby branch of a bank, NBFC, etc. The NBFC also offers MUDRA Card for working capital loans, cash withdrawals from any ATMs and making purchases through POS machines.
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Key Highlights of Mudra Loan |
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| Loan Facility | Cash Credit, Overdraft & Term Loan |
| Interest Rates | Depends on the bank’s policy decisions |
| Loan Amount | Up to Rs 10 lakhs (Up to Rs 20 lakhs proposed in Budget 2024) |
| Tenure | Depends on the bank’s policy decisions |
| Processing Fees | For Shishu category (loans up to Rs 50,000) – No processing fee |
| For Kishore & Tarun category – depends on the financial institution | |
Updated as of 7 November 2024
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Mudra Loan Interest Rates
MUDRA does not set the interest rates of PMMY loans. The agency has given freedom to lending institutions over setting interest rates of MUDRA loans. Thus, prospective borrowers planning to avail MUDRA loan should contact the concerned bank/NBFC/MFIs for their MUDRA loan interest rates.
Below are the Mudra loan interest rates offered by various banks:-
| Lenders | Interest Rates (p.a.) |
| Union Bank of India | 10.55% – 12.05% |
| Punjab National Bank | 9.40% |
| Canara Bank | 10.30% – 15.00% |
| Indian Bank | 10.80% – 10.90% |
Features of PM Mudra Yojana
Loan Amount
MUDRA loans are categorised as ‘Shishu’, ‘Kishore’ and ‘Tarun’ to signify the development and funding needs of an applicant:
| Category | Loan Amount |
| Shishu | Up to Rs 50,000 |
| Kishore | Above Rs 50,000 to Rs 5 lakh |
| Tarun | Above Rs 5 lakh to Rs 10 lakh* |
*Budget 2024 has proposed to increase the Mudra loan limit to Rs 20 lakh for entrepreneurs who have repaid previous loans under the ‘Tarun’ category.
Collateral
The loans are collateral free and are covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC).
Repayment Tenure
MUDRA has not specified any repayment tenure for the loans refinanced through the PMMY scheme. The agency has given a free hand to the lending institutions offering MUDRA loans to set their loan tenures as per their own rules and the regulations set by the RBI.
Types of Mudra Loan Facility
The loans under the PMMY scheme are offered in the form of term loan, overdraft and Cash Credit (CC).
Fees & Charges
The lending institutions providing MUDRA loans can consider charging of upfront fee as per their internal guidelines. However, most lenders waive the upfront fee or processing charges for loans under the Shishu category.
Registration Process of PM MUDRA Yojana
Prospective business loan borrowers can visit designated Public and Private Sector Commercial Banks, Cooperative Banks, Regional Rural Banks (RRBs), Micro Finance Institutions, Foreign Banks and Non-Banking Finance Companies for availing loan under PMMY.
Individuals can also apply for MUDRA loans online through UdyamMitra portal – www.udyamimitra.in
Eligibility Criteria of PM MUDRA Loan
MUDRA loans are offered to micro enterprise sector in manufacturing, service, processing, sector or trading including activities allied to agriculture. The prospective borrower should not be defaulter in any bank or any financial institution and should have a satisfactory credit track record.
The educational qualification (if any) of an applicant can also be assessed depending on the nature of the proposed activity, and its requirement. Furthermore, applicants may be required to have the necessary experience or skills or knowledge to carry out the proposed activity.
Eligible borrowers of PMMY
- Individuals
- Proprietary concern
- Partnership Firm
- Private Ltd. Company
- Public Company
- Any other legal forms
Eligible Activities covered under MUDRA Loans
Transport Vehicle
- Purchase of transport vehicles for transportation of goods and passengers such as auto rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, taxis, etc.
- Tractors/Power Tillers/Tractor Trolleys/Two Wheelers used only for commercial purposes
Community, Social & Personal Service Activities
Salons, gymnasium, boutiques, DTP and photocopying facilities, tailoring shops, dry cleaning, medicine shops, beauty parlours, cycle and motorcycle repair shops, courier agents, etc.
Food Products Sector
Papad making, biscuit/bread/bun making, jam/jelly making, ice cream making units, agricultural produce preservation at rural level, achaar making, cold storages, small service food stalls and day to day catering / canteen services, cold chain vehicles, ice making units, sweet shops, etc.
Textile Products Sector/Activity
Handloom, chikan work, traditional embroidery and hand work, computerized embroidery, traditional dyeing and printing, zari and zardozi work, powerloom, khadi activity, apparel design, knitting, cotton ginning, stitching and other textile non garment products such as vehicle accessories, bags, furnishing accessories, etc.
Business loans for Traders and Shopkeepers
- Loan to individuals for running their shops
- Trading and business activities/service enterprises
- Non-farm income generating activities with beneficiary
Equipment Finance Scheme for Micro Units
Individual setting up micro enterprises by purchasing required machinery or equipment, with per beneficiary
Activities allied to agriculture
Pisciculture, poultry, livestock-rearing, bee keeping, aggregation agro industries, food & agro-processing, diary, fishery, grading, sorting, agri-clinics and agribusiness centres, etc. and services supporting mentioned activities that which promote livelihood or are income generating. Crop loans, land improvement such as irrigation, canal and wells are excluded from the activities allied to agriculture.
MUDRA Card
MUDRA Card is a RuPay debit card, which offers working capital loan in the form of an overdraft facility. The card allows multiple withdrawals and credits, digitalizing transactions and creating credit history for the borrower. MUDRA card is issued against MUDRA loan account and can be used across the country for cash withdrawals from ATM/micro ATM or make purchase using any Point of Sale (POS) machines. The borrower can repay the amount anytime, depending on the availability of surplus cash.
Documents required for availing PM MUDRA Loans
Documentation for availing loan under Shishu Category
- Identity Proof – Self attested copy of Driving Licence/PAN Card/Voter’s ID Card/ Aadhaar Card/Photo Ids issued by Govt. authority/Passport etc.
- Residence Proof – Latest telephone bill/property tax receipt (not older than 2 months)/ Voter’s ID Card/Electricity Bill/Aadhar Card/Domicile Certificate/Passbook of proprietor or partners or latest bank account statement attested by bank officials/Passport/ Certificate issued by local panchayat or government authority or or municipality etc.
- Recent photograph (2 copies) of an applicant, not older than 6 months.
- Quotation of Machinery or other items to be purchased
- Name of supplier or price & details of machinery and/or items to be purchased
- Proof of Identity and Address of the Business Enterprise – Copies of registration certificates/relevant licences/ other documents related to the ownership, address, identity of business unit, if any
- Proof of category like ST/ SC/OBC/Minority etc.
Documentation for availing loan under Kishor and Tarun Category
- Identity Proof – Self certified copy of Voter’s ID card/ PAN Card/Aadhar Card/ Driving License/Passport
- Residence Proof – Latest telephone bill, Property tax receipt (not older than 2 months), Voter’s ID card, Electricity bill, Aadhaar Card and Passport of Proprietor/Partners/Directors
- Proof of ST/SC/OBC/Minority
- Identity/Address Proof of the Business Enterprise – Copies of registration certificates/relevant licenses/other documents related to the identity, ownership and address of business unit
- Account statement of the last 6 months from the existing banker, if any
- Balance sheet of the units of last 2 years along with income tax or sales tax return etc. (Applicable for all cases from Rs.2 lakhs and above)
- Projected balance sheets of 1 year in case of working capital limits and for the loan duration in case of term loan (Applicable for all cases from Rs.2 lakhs and above)
- Sales achieved during the current FY up to the date of submission of application
- Project report (for the proposed project) having details of economic and technical viability
- Articles and Memorandum of association of the Partnership Deed of Partners/company/ etc.
- In absence of third party guarantee, asset and liability statement from the applicant including directors and partners can be asked to know the net-worth.
- 2 photocopies of Partners/Proprietor/Directors
| Related Links |
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| How to Apply for Mudra Loan | Mudra Loan Eligibility |
| Mudra Loan Interest Rates | Mudra Loan Application Form |
| Mudra Loan EMI Calculator | Mudra Loan Documents |
| Mudra Loan Subsidy | SBI Mudra Loan |
FAQs on Mudra Loan
What is MUDRA loan yojana?
MUDRA Loan Yojana or Prandhan Mantri MUDRA Yojana is a government scheme for offering loans of up to Rs 10 lakh to micro enterprises through commercial banks, small finance banks, MFIs, RRBs and NBFCs.
How to apply for the MUDRA loan?
To apply for a MUDRA loan, borrowers can submit an application online at the UdyamMitra portal – www.udyamimitra.in or through designated lending institutions. Applicants can also visit designated banks and financial institutions to apply for the loan.
What is the interest rate for Mudra loan?
Micro Units Development & Refinance Agency (MUDRA) does not determine the interest rates for PMMY loans. Lending institutions have the freedom to set the interest rates for MUDRA loans. Therefore, MSMEs interested in MUDRA loans should contact the relevant bank/NBFC/MFI to inquire about their Mudra loan interest rates.
What are the benefits of Mudra loan?
Mudra loans are collateral-free loans of up to Rs 10 lakh offered to micro and small enterprises. The loan is covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC) to improve credit access for the MSEs. Mudra loan borrowers can also avail MUDRA Card, a RuPay debit card, to manage the working capital portion of their loan. They can use the MUDRA Card for drawing cash from ATM or for making purchases through Point of Sale (POS) machines.
Who is eligible for Mudra loan?
Micro-enterprises engaged in manufacturing, service, processing, sector or trading activities, including those allied to agriculture, are eligible for availing Mudra loans. The applicant should not be a defaulter in any bank/financial institution and should have a satisfactory credit track record.
What is Shishu Mudra loan?
Shishu Mudra loan is one of the three categories of Mudra loan, which allows micro-enterprises to avail loan amounts of up to Rs 50,000 in the form of cash credit, overdraft and term loan.
How to apply Shishu Mudra loan online?
To apply for a Shishu MUDRA loan, prospective borrowers can do so online through the UdyamMitra portal at www.udyamimitra.in. Alternatively, borrowers can also visit designated cooperative banks, RRBs, public and private sector commercial banks, foreign banks, microfinance institutions, and NBFCs that offer Shishu MUDRA loans online.
How to fill Mudra loan application form?
Borrowers can fill Mudra loan application form by visiting UdyamMitra portal – www.udyamimitra.in or by visiting designated lending institutions offering loan online. Applicants can also visit designated banks and financial institutions to apply offline for the loan.
Which banks provide Mudra loan?
Designated cooperative banks, public/private sector commercial banks, Regional Rural Banks (RRBs), foreign banks and NBFCs provide MUDRA loan.
How many types of mudra loan?
Mudra loan has been categorised into Shishu, Kishor and Tarun depending on the loan amount.
The loan amount of Shishu Mudra loan can go up to Rs 50,000; Kishore MUDRA loan can go up to Rs 5 lakhs and Tarun MUDRA loan can go up to Rs 10 lakhs. Note that Budget 2024 has proposed to increase the Mudra loan limit to Rs 20 lakh for entrepreneurs who have repaid previous loans under the ‘Tarun’ category.
What is collateral security in mudra loan?
MUDRA offers a loan of up to Rs 10 lakhs without collateral security. The collateral is covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC).
What are the documents required for a MUDRA loan?
The documents required for Mudra loan include identity and residence proof of the applicant, copies of registration certificates and other documents related to the ownership, identity and address of the business unit.
What is the repayment period in MUDRA loan?
Micro Units Development & Refinance Agency Ltd. (MUDRA) has not specified the repayment tenure of MUDRA loan. The lending institutions are free to determine the repayment tenure of their MUDRA loan borrowers based on the cash flow of their enterprise and the terms & conditions set by the of the lender.
How to apply for MUDRA loan for business?
Borrowers can apply for a MUDRA loan online by visiting UdyamMitra portal – www.udyamimitra.in or designated lending institutions offering loan online. Applicants can also visit the branches of designated cooperative banks, Regional Rural Banks (RRBs), public/private sector commercial banks, micro finance institutions, foreign banks and NBFCs for making MUDRA loan application.
What is the maximum limit of loan under MUDRA Yojana?
The maximum limit of MUDRA Yojana loan is Rs 10 lakhs (Up to Rs 20 lakhs proposed in Budget 2024).