Pradhan Mantri Mudra Yojana | PMMY Scheme Details

The Pradhan Mantri Mudra Yojana, launched by the Indian government, is a comprehensive financial inclusion program aimed at supporting small and micro enterprises across the country. Its primary objective is to provide financial assistance to entrepreneurs who often face difficulty in accessing credit from traditional banking institutions.

The scheme offers three distinct categories of loans – Shishu, Kishore, and Tarun – catering to businesses at various stages of growth and development.

Under Shishu, the scheme provides small loans of up to Rs. 50,000 to budding entrepreneurs to help them establish their ventures. Kishore offers loans ranging from Rs. 50,000 to Rs. 5 lakhs for businesses seeking to expand or upgrade their operations.

Tarun, the highest category, extends loans up to Rs. 10 lakhs for well-established enterprises aiming to further scale their activities.

One of the key features of the Pradhan Mantri Mudra Yojana is that it does not require borrowers to provide collateral or security for these loans. This approach makes it more accessible to a wider range of individuals, especially those who lack valuable assets. The interest rates on Mudra loans are competitive and vary depending on the lending institution and the loan amount.

The scheme also promotes financial inclusion by encouraging women entrepreneurs and those belonging to marginalized sections of society to avail of its benefits. Additionally, applicants can apply for Mudra loans online through the official website, making the process more convenient and accessible.

The Pradhan Mantri Mudra Yojana plays a pivotal role in fostering entrepreneurship, job creation, and economic development in India by providing much-needed financial support to small and micro-businesses, thus contributing to the country’s economic growth and prosperity.

PMMY Achievements Since Inception

Financial Year :2015-2016
No. of PMMY Loans Sanctioned :34880924
Amount Sanctioned :137449.27 Crore
Amount Disbursed :132954.73 Crore
Financial Year :2016-2017
No. of PMMY Loans Sanctioned :39701047
Amount Sanctioned :180528.54 Crore
Amount Disbursed :175312.13 Crore
Financial Year :2017-2018
No. of PMMY Loans Sanctioned :48130593
Amount Sanctioned :253677.10 Crore
Amount Disbursed :246437.40 Crore
Financial Year :2018-2019
No. of PMMY Loans Sanctioned :59870318
Amount Sanctioned :321722.79 Crore
Amount Disbursed :311811.38 Crore
Financial Year :2019-2020
No. of PMMY Loans Sanctioned :62247606
Amount Sanctioned :337495.53 Crore
Amount Disbursed :329715.03 Crore
Financial Year :2020-2021
No. of PMMY Loans Sanctioned :50735046
Amount Sanctioned :321759.25 Crore
Amount Disbursed :311754.47 Crore
Financial Year :2021-2022
No. of PMMY Loans Sanctioned :53795526
Amount Sanctioned :339110.35 Crore
Amount Disbursed :331402.20 Crore
Financial Year :2022-2023
No. of PMMY Loans Sanctioned :62310598
Amount Sanctioned :456537.98 Crore
Amount Disbursed :450423.66 Crore
Financial Year :2023-2024
No. of PMMY Loans Sanctioned :23478803 *
Amount Sanctioned :179835.22 Crore *
Amount Disbursed :173390.30 Crore *

Who can take Pradhan Mantri Mudra Yojana?

The Pradhan Mantri Mudra Yojana (PMMY) is designed to support individuals, especially those in the micro and small business sector, in India. Eligibility for PMMY loans is broadly defined, and the scheme is open to various categories of applicants, including:

  1. Micro and Small Enterprises: Small businesses engaged in manufacturing, trading, or services sectors can apply for Mudra loans. This includes non-farm income-generating activities.
  2. Entrepreneurs: Individuals who wish to start or expand their small businesses, such as shopkeepers, traders, artisans, and small-scale entrepreneurs, are eligible.
  3. Non-Corporate Entities: Non-corporate entities such as partnership firms, proprietorship concerns, and other legal business structures can also apply for Mudra loans.
  4. Women Entrepreneurs: PMMY encourages women to take advantage of the scheme’s benefits by providing special incentives and support to female entrepreneurs.
  5. Scheduled Caste (SC) and Scheduled Tribe (ST) Applicants: The scheme aims to promote financial inclusion, and hence, individuals from SC/ST communities can benefit from the Pradhan Mantri Mudra Yojana.
  6. Minorities and Other Marginalized Sections: Individuals belonging to minority communities and other economically disadvantaged sections of society can apply for Mudra loans.
  7. Existing Business Owners: Even if you already have a small business, you can apply for a Mudra loan to expand or upgrade your operations.

The eligibility criteria are quite inclusive, applicants are typically required to meet certain basic requirements related to their business plans, creditworthiness, and the purpose of the loan. Additionally, the loan category (Shishu, Kishore, or Tarun) you are eligible for may depend on the stage of your business and the loan amount you require. It is advisable to check with participating banks or financial institutions for specific eligibility criteria and documentation requirements, as they may vary from one institution to another.

What are the eligibility criteria for availing a Mudra loan?

Pradhan Mantri Mudra Yojana (PMMY)

Mudra loans, a crucial component of the Pradhan Mantri Mudra Yojana (PMMY), are designed to support small and medium-sized businesses across India. These loans come with different categories based on the business’s stage and financial needs. The Mudra scheme offers three products:

1. Shishu: This category provides loans of up to ₹50,000 to individuals in the early stages of their business.

2. Kishore: Loans in the range of ₹50,000 to ₹5 lakh are available under this category.

3. Tarun: Individuals and businesses seeking loans between ₹5 lakh and ₹10 lakh can opt for the Tarun category.

To be eligible for a Mudra loan and avail loan amounts of up to ₹10 lakh, applicants must meet specific criteria, which are detailed below:

  • Minimum Age: Applicants should be at least 18 years old.
  • Maximum Age: The upper age limit for Mudra loan applicants is 65 years.
  • Eligible Borrowers: Mudra loans can be availed by both new and existing Micro, Small, and Medium Enterprises (MSMEs).
  • Collateral: One of the significant advantages of Mudra loans is that they do not require collateral or third-party security.
  • Eligible Lending Institutions: Various types of lending institutions are eligible to provide Mudra loans, including Public Sector Banks, Private Sector Banks, Regional Rural Banks, and Micro-Finance Institutions.
  • Documentation: Applicants typically need to provide documents such as proof of identity, proof of residence, a completed application form, and passport-sized photographs.

Eligible entities for Mudra loans encompass a broad spectrum:

  • Startups
  • Small manufacturers and vendors
  • Artisans
  • Fruits and vegetables dealers
  • Individuals engaged in agricultural activities like livestock and poultry
  • Shopkeepers
  • Retailers
  • MSMEs

Furthermore, to qualify for a Mudra loan, applicants must be Indian citizens with no record of any criminal activity. They should also have a clean repayment history with any bank. Additionally, providing business statements and reports projecting revenue may be required to assess the applicant’s financial viability.

Mudra loans cater to non-farm enterprises involved in trading, services, and manufacturing sectors, making them accessible to a wide range of businesses.

Lending institutions eligible to provide Mudra loans include public and private sector banks, regional rural banks, micro-finance institutions, non-banking financial companies (NBFCs), and small finance banks.

These lending institutions also need to meet specific criteria to offer Mudra loans, such as generating profits in the last two years, maintaining acceptable net performing assets ratios, and having a minimum net worth as specified.

The Pradhan Mantri Mudra Yojana has significantly expanded access to credit for small and medium enterprises in India, enabling them to grow and flourish. With various lending institutions participating in the scheme, businesses across the nation can access financial support tailored to their specific needs and aspirations.

pradhan mantri mudra yojana application form

Common Loan Application form for Kishor and Tarun
Application Form for Shishu
Check list for Shishu Application

How much loan can one get under Pradhan Mantri Mudra Yojana?

Under the Pradhan Mantri Mudra Yojana (PMMY), individuals and businesses can access loans in the following categories:

  1. Shishu: Up to Rs. 50,000.
  2. Kishore: From Rs. 50,000 to Rs. 5 lakhs.
  3. Tarun: From Rs. 5 lakhs to Rs. 10 lakhs.

So, the maximum loan amount one can get under PMMY is Rs. 10 lakhs in the Tarun category.

pradhan mantri mudra yojana interest rate

MUDRA loans, a crucial component of the Pradhan Mantri Mudra Yojana (PMMY), offer financial support to individuals and businesses in India, primarily in the micro, small, and medium-sized enterprise (MSME) sector.

The eligibility criteria, interest rates, and loan terms can vary depending on the lending institution. Here, we provide a detailed table outlining the interest rates offered by various banks participating in the Mudra Yojana, along with key loan details:

MUDRA Loan Interest Rate by Banks

BankInterest RateLoan Tenure
State Bank of India (SBI)Linked to MCLR1-5 years
ICICI BankAs per bank guidelinesDiscretion of the bank
IDBI BankLinked to Bank’s Base Rate and Rating1-5 years
UCO Bank8.85% p.a. onwardsDiscretion of the bank
Bank of Baroda9.65% p.a.Discretion of the bank
Indian Overseas BankAs per bank guidelinesDiscretion of the bank
Union Bank of India7.30% p.a. onwardsDiscretion of the bank
HDFC BankAs per bank guidelinesDiscretion of the bank
Canara BankAs per bank guidelinesUp to 7 years
Central BankAs per bank guidelinesDiscretion of the bank
Allahabad BankAs per bank guidelines1-5 years
Bank of Maharashtra9.25% p.a.Discretion of the bank
Bank of IndiaLinked to MCLR1-7 years
Vijaya Bank9.65% p.a. (Merged with Bank of Baroda)Discretion of the bank
Oriental Bank of CommerceAs per bank guidelinesDiscretion of the bank
Tamilnad Mercantile Bank8.95% p.a. onwards1-7 years

These interest rates are subject to change and may depend on the nature of the applicant’s business and their creditworthiness.

Mudra loan at a low-interest rate, Consider the following tips:

  1. Compare Rates: Compare the loan rates offered by various banks and NBFCs that provide Mudra loans.
  2. Business Nature: Understand that the Mudra loan interest rate depends on the nature and type of your business.
  3. Risk Level: Lower-risk businesses typically receive loans at lower interest rates.
  4. Creditworthiness: Ensure that your creditworthiness and repayment capacity align with the lender’s requirements.
  5. Business Metrics: Higher annual turnover and business volume can lead to lower interest rates.
  6. Loan Amount and Tenure: Consider factors like the loan amount required and the chosen repayment tenure.
  7. Default History: Applicants with no previous loan defaults typically have an advantage.

Under the Pradhan Mantri Mudra Yojana (PMMY), Mudra loans are categorized into three segments:

1. Shishu: This segment provides loans up to ₹50,000, catering to budding entrepreneurs and early-stage businesses.

2. Kishor: Loans ranging from ₹50,001 to ₹5,00,000 are available under this category, serving entrepreneurs needing larger funds for business sustainability and growth.

3. Tarun: This category offers loans from ₹5,00,001 to ₹10,00,000, supporting individuals and businesses setting up large enterprises or expanding their operations.

pradhan mantri mudra yojana online apply Process

pradhan mantri mudra yojana online apply

Securing financing can be a challenge for small business owners, but the Pradhan Mantri Mudra Yojana (PMMY) offers a solution to ease the financial burden.

This scheme provides loans of up to Rs. 10 lakhs to support small business owners with their capital and operational expenses. To determine if you qualify for this loan and understand the step-by-step application process, please read on.

How to Apply for Mudra Loan Online?

The Mudra scheme offers financial support to businesses operating in the non-corporate and non-farm sectors of the micro, small, and medium enterprises (MSME) sector. It’s important to note that Mudra loans are intended for business purposes and cannot be used for personal needs. You must have a genuine business plan in place before applying for the loan.

Interested applicants can apply for a Mudra Loan online by following these simple steps:

Step 1: Visit the official website of the PMMY-authorized financial institution where you intend to apply for the Mudra loan. Download the relevant application form (Shishu, Kishore, or Tarun) that suits your business needs.

Step 2: Complete the downloaded application form by providing personal and business details, including your name, date of birth, residential/business address, educational qualifications, and more.

Step 3: Submit the completed application form, ensuring you have all the required documents ready for submission to the bank or lending institution.

Step 4: After processing and verifying your Mudra loan application form and attached documents, the loan will be approved, and the funds will be disbursed into your bank account.

Procedure to Apply for Mudra Loan Offline:

If you encounter any issues while applying for a Mudra loan online, you can opt for the offline application method. The steps for applying for a Mudra Loan offline are as follows:

Step 1: Visit a PMMY-authorized financial institution or NBFC.

Step 2: Prepare a documented business plan.

Step 3: Complete the Mudra loan application form, providing all necessary details.

Step 4: Submit the application form along with the required documents and passport-sized photographs.

Step 5: Once the documents are verified, your loan request will be approved, and the loan amount will be credited to your bank account.

Documents Required for Mudra Loan Application:

The list of documents required for a Mudra loan application includes:

  • A Mudra application form with two recent passport-sized photographs
  • KYC documents such as passport, voter ID card, driving license, Aadhaar card, utility bills (water or electricity), and PAN card
  • Special identity documents (e.g., caste certificate) if applicable
  • Proof of business income
  • Address proof for your business
  • Proof of business establishment (if applicable)
  • Bank account statements for the past 12 months
  • Income Tax Returns (ITR) for the past 2 years (if applicable)
  • Any additional documents requested by the bank officials

It’s important to note that specific documentation requirements may vary slightly from one bank or lending institution to another.

Eligible Entities for Mudra Loan:

The Mudra loan scheme is available to a wide range of individuals and entities, including:

  • Entrepreneurs looking to start a business
  • Owners of small or medium-sized businesses
  • Artists
  • Retailers
  • Traders
  • Manufacturers
  • Sole proprietors
  • Limited liability partnerships
  • Partnership firms
  • Small and micro manufacturing businesses

These entities can apply for Mudra loans based on their specific business needs and eligibility criteria.

What are the three categories of loans available under the Pradhan Mantri Mudra Yojana, and how do they differ?

The three categories of Mudra Loans are:Shishu: Up to Rs. 50,000, suitable for small businesses in the early stages.Kishore: Rs. 50,000 to Rs. 5 lakhs, for businesses needing moderate capital for growth.Tarun: Rs. 5 lakhs to Rs. 10 lakhs, for established businesses with expansion plans.

Can individuals with bad credit history apply for a Mudra loan?

Mudra loans are generally collateral-free, and eligibility is based on business viability. While a bad credit history may not disqualify you, a strong business plan and repayment capacity are crucial.

How can I check the status of my Pradhan Mantri Mudra Yojana loan application?

To check your loan application status, contact the lending institution where you applied or visit their official website. They can provide updates on your application’s progress.

Are there any collateral requirements for availing a Mudra loan?

No, Mudra loans are typically collateral-free. They are provided based on the viability of your business plan and your ability to repay.

What is the repayment period for loans obtained through the Mudra Yojana?

The repayment period for Mudra loans can vary but generally ranges from 3 to 5 years. The specific terms may depend on the lending institution and the type of business.

Can women entrepreneurs avail of special benefits or incentives under this scheme?

Yes, women entrepreneurs can benefit from special incentives and preferences under the Mudra Yojana, such as lower interest rates and reduced processing fees.

What are the documents required when applying for a Mudra loan?

Documents typically include proof of identity, residence proof, a completed application form, passport-sized photos, business proof, bank statements, and other documents as per the lender’s requirements.

Is there a subsidy or interest rate concession available for Mudra loans?

The government may provide interest rate concessions to lending institutions, but these concessions may or may not be directly passed on to borrowers. The actual interest rate depends on the lending institution.

How can I locate the nearest bank or financial institution participating in the Mudra Yojana?

You can locate the nearest participating bank or institution by visiting the official PMMY website or by inquiring at your local bank branch.

What is the procedure for upgrading a Mudra loan to a higher category for expanding my business?

To upgrade your Mudra loan category, you should contact your lending institution, provide evidence of business growth and the need for additional capital, and follow their guidelines for reevaluating and adjusting your loan category.

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