Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India. By offering collateral‐free loans of up to ₹10 lakh to non-corporate, non-farm micro and small enterprises. These loans are classified as MUDRA loans under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs. The scheme was launched on 8th April, 2015 by the Hon’ble Prime Minister.
What is Mudra Yojana?
Mudra loan provides support to micro-units and small enterprises under the Prime Minister Mudra Yojana (PMMY). People need money to start their own businesses, but they face considerable difficulties in obtaining loans. Keeping this in mind, the central government has launched the Pradhan Mantri Mudra Loan Scheme. This scheme provides financial assistance for starting a business. This scheme is particularly beneficial for the non-corporate small business segment.
Under the Mudra Loan Scheme, small manufacturing units, service sector units, shopkeepers, fruit and vegetable vendors, truck operators, food service units, retail shopkeepers, machine operators, food processors etc. can also take loan under the Mudra Scheme.
The loans under Pradhan Mantri Mudra Yojana can be availed through eligible Member Lending Institutions (MLIs), which include:
- Public Sector Banks
- Private Sector Banks
- State operated cooperative banks
- Rural banks from regional sector
- Micro Finance Institution (MFI)
- Non-Banking Finance Company (NBFC)
- Small Finance Banks (SFBs)
- Other financial intermediary approved by Mudra Ltd. as member financial institutions
Types of loans provided
The scheme has been classified under four categories as ‘SHISHU’, ‘KISHORE’ , ‘TARUN’ and ‘TARUN PLUS’ to signify the stage of growth / development and funding needs of the beneficiary micro unit/ entrepreneur.
- Shishu : covering loans upto 50,000/-
- Kishor : covering loans above 50,000/- and upto 5 lakh
- Tarun : covering loans above 5 lakh and upto 10 lakh
Mudra Yojana Benefits
- The minimum age requirement is 18 years old, and the maximum age limit is 65 years old.
- Interest rates differ from one bank to the next.
- Rs. 30,000 is the minimum loan amount.
- The maximum loan amount is Rs.10 lakh.
- No collateral or security is required.
- There is no processing fee.
- The tenure of repayment is up to 5 years.
- Applicants who have never had a loan default in the past will be considered.
Eligibility Criteria for Mudra Loan
- Age Range: Applicants should be between 18 and 65 years old.
- Loan Amounts: Ranges from Shishu Yojana (up to Rs. 50,000) to Tarun Yojana (up to Rs. 10 lakhs).
- Industry Type: Open to individuals and enterprises in manufacturing, trading, and services.
- Company Status: Available for both new startups (Shishu) and existing businesses looking to expand (Kishor and Tarun).
- Operational Area: Nationwide, supporting rural and urban enterprises.
Documents required for Mudra Yojana
Only eligible individuals can apply for the Mudra Loan Scheme. Required documents include Aadhaar card, voter ID card, ration card, PAN card, caste certificate, and business-related documents.
- Identity Proof: Aadhaar card, PAN card, Driver’s license, or voter’s ID.
- Address Proof: Passport, utility bills, bank statements, etc.
- Business Proof: License and address proof of the enterprise, if applicable.
- Financial Documents: Bank statements, quotation of machinery or equipment to be purchased.
Mudra Loan Interest Rate and Charges
| Loan Amount Range | Enterprise Type | Interest Rate Calculation |
|---|---|---|
| Up to Rs. 50,000 | Micro Enterprises | MCLR + Service Provider (SP) Charge |
| Small Enterprises | MCLR + Service Provider (SP) Charge | |
| Rs. 50,001 to Rs. 2 lakhs | Micro Enterprises | MCLR + SP Charge + Bank Loan. |
| Small Enterprises | MCLR + SP Charge + Bank Loan | |
| Rs. 2 lakhs to Rs. 10 lakhs | Micro Enterprises | MCLR + SP Charge + Bank Loan. |
| Small Enterprises | MCLR + SP Charge + Bank Loan |
How to Apply for a Mudra Loan?
Step 1: Visit the PSB Loans website.
Step 2: Click on ‘Login’ and click on ‘Register’ option.
Step 3: Enter the required details and register on the portal.
Step 4: Select ‘Mudra Loan’ option and click on ‘Apply Now’.
Step 5: Fill out the application, upload the documents and submit it.
Step 6: Once the application is approved, submit it to the bank to disburse the loan amount.
Mudra loans were specifically designed to provide access to loans for those starting a business. Loans are offered at very low interest rates.