MUDRA Loan Scheme is a transformative loan scheme designed to enhance financing access for small businesses in India. The full form of MUDRA is Micro Units Development and Refinance Agency. The core aim of this scheme is to promote small business growth and job creation. Read on to know how to apply, benefits, interest rates, eligibility criteria and other details.
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What is Mudra Loan Scheme?
Mudra loan is an unsecured small business loan given by banks, NBFCs (non-banking financial companies), MFIs (microfinance institutions), etc. The loans are available in three categories – Shishu, Kishore, and Tarun. The maximum loan amount has been increased from Rs. 10 lakh to Rs. 20 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 Loans
A wide range of businesses can qualify for Mudra Loans, including:
- Small manufacturers
- Retail merchants
- Fresh fruit and vegetable vendors
- Artisans
- Transport service providers
- Catering services
- Repair service providers
- Startups
- Craftsmen and craft producers
Documents Required for MUDRA Loan Application
Before starting your application process, ensure you prepare these documents:
- Aadhaar Card
- Ration Card
- Registered Mobile Number
- Electricity Bill
- Proof of Address
- PAN Card
- Business Registration Document (if applicable)
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 |
Banks/NBFCs offering MUDRA Loan
Under the directive of the RBI, the following banks offer MUDRA loans:
- Axis Bank
- Bank of India
- Bajaj Finserv
- Bank of Baroda
- Bank of Maharashtra
- Central Bank of India
- Canara Bank
- HDFC Bank
- IDBI Bank
- ICICI Bank
- Indian Bank
- IDFC first bank
- Lendingkart Finance
- Karnataka Bank
- Kotak Mahindra Bank
- Punjab National Bank
- State Bank of India (SBI)
- Syndicate bank
- Saraswat Bank
- Tata Capital
- Yes Bank
- Union Bank of India
MUDRA Loan Interest Rates
The latest Mudra loan (PMMY) interest rates offered by top Indian banks in 2025 generally range from around 8.40% to 12% per annum. Here’s an overview of MUDRA loan interest rates from leading banks:
| State Bank of India | Linked to EBLR; usually 3.25% above EBLR (e.g. ~12.15%) |
| Punjab National Bank | Around 9% – 11% |
| HDFC Bank | ~10% – 12% |
| ICICI Bank | ~10% – 12% (estimated) |
| Canara Bank | Starts from 8.85% |
| Bank of Maharashtra | 11.8% |
| Union Bank of India | 10.30% (Shishu), 11–12% (others) |
| Bank of Baroda | BRLLR+SP to BRLLR+SP+2.35% (Complete Rate List) |
| Central Bank of India | 10.05% p.a. |
| Axis Bank | ~10% – 12% (estimated) |
How to Apply for Mudra Loan Scheme
STEP 1: Visit the official website and complete the online loan application form.
STEP 2: Navigate to the Udaymimitra portal link provided on the homepage of Mudra website
STEP 3: Click on Apply Now under the MUDRA Yojana on the homepage under schemes section.
STEP 4: Enter your name, email, and mobile number, then select Generate OTP.
STEP 5: Enter the received OTP and click Submit.
STEP 6: Finalize your registration by providing all required documents.
STEP 7: Review all entered information and click Submit to complete your loan application.
The MUDRA loan scheme aims to help support and refinance MSMEs. Mudra Loans can be availed by individuals, proprietorships, partnerships, and private limited companies. These scheme provide financial support to grow business.