MUDRA (Micro Units Development and Refinance Agency) Loan is a government of India initiative under the Pradhan Mantri MUDRA Yojana (PMMY) to provide collateral-free loans to micro and small enterprises. As of 2024, over ₹27 lakh crore has been disbursed through MUDRA to millions of small businesses across India.
Types of MUDRA Loans
| Category | Loan Amount | For |
|---|---|---|
| **Shishu** | Up to ₹50,000 | New businesses, startups, very small units |
| **Kishore** | ₹50,001 to ₹5 lakh | Growing businesses needing working capital |
| **Tarun** | ₹5 lakh to ₹10 lakh | Established micro units for expansion |
| **Tarun Plus** | ₹10 lakh to ₹20 lakh | Tarun borrowers with good repayment history |
Who is Eligible for MUDRA Loan?
Any Indian citizen engaged in:
Not eligible: Farmers (for crop loans — go to KCC), large industries, non-business purposes
- ▸Manufacturing (small workshops, khadi, village industries)
- ▸Trading (retail shops, wholesale dealers)
- ▸Service sector (beauty parlours, repair shops, garages, tailors, etc.)
- ▸Food processing (flour mills, papad making, pickles, bakery)
- ▸Agricultural allied activities (agri-clinics, food & agro processing)
Interest Rates for MUDRA Loans
Interest rates vary by bank and loan category:
No processing fee for Shishu loans. Kishore and Tarun may have 0.5%–1% processing fee.
- ▸Public sector banks: 8.5%–12% p.a.
- ▸Private banks: 10%–15% p.a.
- ▸NBFCs: 12%–20% p.a.
- ▸Microfinance institutions: 20%–26% p.a.
Documents Required for MUDRA Loan
- ▸Aadhaar card + PAN card
- ▸Business proof (GST registration, Udyam certificate, shop license)
- ▸Proof of SC/ST/OBC category (if applicable — for priority)
- ▸Bank statements (last 6 months)
- ▸Business plan / project report (especially for Kishore and Tarun)
- ▸IT returns (last 2 years, if available)
- ▸Property documents (for Tarun Plus — above ₹10 lakh)
- ▸2 passport-size photographs
How to Apply for MUDRA Loan Online
Option 1 — Direct Bank Application:
Option 2 — Udyamimitra Portal:
Option 3 — PSB Loans in 59 Minutes:
Visit psbloansin59minutes.com for in-principle approval within 59 minutes.
- ▸Visit any scheduled commercial bank, regional rural bank, or NBFC
- ▸Ask for PMMY/MUDRA loan application form
- ▸Submit documents + business plan
- ▸Bank evaluates and sanctions within 15–30 days
- ▸Visit udyamimitra.in
- ▸Register as a borrower
- ▸Search for lenders and apply online
- ▸Track application status online
Government Subsidy Schemes Linked to MUDRA
- ▸Pradhan Mantri Employment Generation Programme (PMEGP): Subsidy 15%–35% of project cost for manufacturing units
- ▸PM SVANidhi: For street vendors — ₹10K to ₹50K loans
- ▸Stand-Up India: For SC/ST and women entrepreneurs — ₹10 lakh to ₹1 crore
- ▸CGTMSE: Credit Guarantee Fund — provides guarantee so banks don't need collateral
Conclusion
MUDRA Loan is the most accessible formal credit for micro entrepreneurs in India. With no collateral requirement and government backing, it enables lakhs of small businesses to grow. Biswa Corporate Solutions helps MSME entrepreneurs prepare their business plan, obtain Udyam registration, and apply for MUDRA/MSME loans with maximum success rate.
