Mudra Loan Eligibility : Pradhan Mantri Mudra Yojana (PMMY)
Source: mudra.org.in · pib.gov.in · Last verified: April 2026
What is Mudra Loan?
Pradhan Mantri Mudra Yojana (PMMY) is a Government of India scheme launched on 8 April 2015. It provides collateral-free loans to non-corporate, non-farm small and micro enterprises. Understanding your Mudra Loan eligibility is the first step to accessing these funds. Loans are not given directly by MUDRA — they are disbursed through Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, Micro Finance Institutions (MFIs), and NBFCs.
The scheme was launched with a vision to fund the unfunded — the millions of small business owners across India who have viable businesses but no access to formal credit. MUDRA works as a refinancing institution, providing funds to banks and NBFCs who then lend directly to borrowers. Since its launch, PMMY has become one of India’s largest financial inclusion programmes, disbursing over ₹32.40 lakh crore across 52 crore loan accounts. Women entrepreneurs, SC/ST applicants, and businesses in rural areas receive priority consideration under this scheme, making it highly inclusive.
Four Loan Categories:
₹5 Lakh
₹10 Lakh
₹20 Lakh
Mudra Loan Eligibility : Who Can Apply?
Documents Required for Mudra Loan
- Aadhaar card, PAN card, Voter ID or Passport (identity proof)
- Aadhaar, utility bill or rent agreement (address proof)
- GST registration, trade licence or MSME/Udyam certificate (business proof)
- Last 6 months bank statements
- Passport size photographs
- Business plan or project report (for new businesses)
- SC/ST/OBC/Minority certificate if applicable
Document requirements may vary by lender. Always confirm with your bank.
How to apply?
The Key Facts
since 2015
since inception
to choose from
to apply
Frequently Asked Questions:
Everything you need to know about Mudra Loan eligibility, documents, and application.
What is Mudra Loan?
Mudra Loan is a government-backed collateral-free loan provided under Pradhan Mantri Mudra Yojana (PMMY), launched on 8 April 2015. It supports non-farm, non-corporate small and micro businesses across India. Loans are disbursed through banks, NBFCs, MFIs, and RRBs — not directly by MUDRA.
What are the four categories of Mudra Loan?
- Shishu — Up to ₹50,000 (new or early-stage businesses)
- Kishor — ₹50,001 to ₹5 lakh (businesses looking to expand)
- Tarun — ₹5 lakh to ₹10 lakh (established businesses scaling up)
- Tarun Plus — ₹10 lakh to ₹20 lakh (for those who have successfully repaid a Tarun loan; introduced in Budget 2024-25)
Is collateral required for Mudra Loan?
No collateral is required for any category of Mudra Loan. You do not need to pledge any property or asset to apply. This is one of the key advantages of the scheme for small business owners.
Who is eligible to apply for Mudra Loan?
Any Indian citizen aged 18 to 65 years running or planning a non-farm business in manufacturing, trading, or services can apply. This includes shopkeepers, street vendors, artisans, freelancers, and small manufacturers. Women entrepreneurs and SC/ST/OBC applicants receive priority.
Can farmers apply for Mudra Loan?
No. Mudra Loan is not available for purely agricultural or farming businesses. However, allied activities like food processing, dairy, poultry, or agri-trading (non-farm income) may be eligible. Confirm with your bank.
Can a new business(startup) apply for Mudra Loan?
Yes. New businesses can apply under the Shishu category (up to ₹50,000). You will need a clear business plan or project report. Existing businesses with expansion plans can apply under Kishor or Tarun.
Is there a minimum CIBIL required for Mudra Loan?
There is no officially mandated minimum CIBIL score under PMMY. However,individual lenders may check your credit history, and a poor score or existing loan defaults can affect approval. Maintaining a score above 650 improves your chances significantly.
What documents are needed for Mudra Loan?
Commonly required documents include:
- Identity proof: Aadhaar, PAN, Voter ID or Passport
- Address proof: Aadhaar, utility bill or rent agreement
- Business proof: GST certificate, trade licence or Udyam certificate
- Last 6 months bank statements
- Passport-size photographs
- Business plan / project report (for new businesses)
- Caste certificate if SC/ST/OBC/Minority
Document requirements may vary by lender — always confirm with your bank.
How do I apply for a Mudra Loan?
You can apply online at udyamimitra.in or offline by visiting your nearest bank, RRB, NBFC, or MFI. Applying is completely free — MUDRA does not engage agents or middlemen. Do not pay anyone to process your application.
How long does it take to get a Mudra Loan approved?
Processing time varies by lender. Typically,Shishu loans can be processed within 7–10 working days. Kishor and Tarun loans may take 2–4 weeks depending on document verification and business assessment by the bank.
What is the interest rate on Mudra Loan?
MUDRA does not fix a standard interest rate. Each lender sets their own rate based on RBI guidelines. Typical rates range from 8.5% to 12% per annum for most public sector banks. Rates may be higher at MFIs or NBFCs. Always compare rates before choosing a lender.
What is the repayment period for Mudra Loan?
Repayment tenures generally range from 1 to 5 years depending on the loan category and lender. Some lenders offer a moratorium (grace period) of 3–6 months before repayment begins, particularly for new businesses.
What is Mudra Card and how does it work?
The Mudra Card is a RuPay debit card issued alongside your Mudra Loan for working capital purposes. It works like a credit card — you draw funds as needed up to the sanctioned limit and pay interest only on the amount used. It is particularly useful for managing day-to-day business expenses.
Can I apply for a Mudra Loan more than once?
Yes. You can apply for a Mudra Loan multiple times, provided you have repaid the previous loan without default. Successful Tarun borrowers are eligible for the Tarun Plus category (up to ₹20 lakh), introduced in Budget 2024-25.
Disclaimer: This page provides general guidance on Mudra Loan eligibility for informational purposes only. Loan approval is subject to the lender’s assessment. Always verify current scheme details at mudra.org.in before applying.
Source: mudra.org.in · pib.gov.in · Union Budget 2024-25