In shortPradhan Mantri MUDRA Yojana provides collateral-free business loans up to Rs 20 lakh for micro and small enterprises. Four categories exist: Shishu up to Rs 50,000, Kishor up to Rs 5 lakh, Tarun up to Rs 10 lakh, and Tarun Plus up to Rs 20 lakh. Apply through banks, NBFCs, microfinance institutions, or udyamimitra.in.
Key facts
- Nodal ministry
- Department of Financial Services, Ministry of Finance, through Micro Units Development and Refinance Agency Limited
- Level
- Central
- Launched
- 2015
- Last date
- Open all year
Mudra loans are for the smallest businesses in India, the ones banks used to turn away. A vegetable seller, a tailor, a mechanic, a beauty parlour owner or a small workshop can borrow up to Rs 20 lakh without putting up any collateral or finding a guarantor.
The loan comes in four sizes. Shishu goes up to Rs 50,000 and is meant for someone just starting out. Kishor covers Rs 50,000 to Rs 5 lakh for a business finding its feet. Tarun goes up to Rs 10 lakh, and Tarun Plus takes you from Rs 10 lakh to Rs 20 lakh, but only if you have already repaid a Tarun loan cleanly.
Mudra itself does not lend to you. You apply to a bank, small finance bank, NBFC or microfinance institution, or through the udyamimitra portal. Be careful of agents, because no middleman is authorised to arrange these loans.
What you get
Collateral free business loans of up to Rs 20 lakh in four categories: Shishu up to Rs 50,000, Kishor above Rs 50,000 and up to Rs 5 lakh, Tarun above Rs 5 lakh and up to Rs 10 lakh, and Tarun Plus above Rs 10 lakh and up to Rs 20 lakh for borrowers who have already repaid a Tarun loan.
Who is eligible
- The borrower must be an Indian citizen running or planning a non-corporate, non-farm micro or small enterprise
- The activity must be in manufacturing, trading, services or allied agricultural work generating income
- The credit requirement must be Rs 20 lakh or less
- The applicant should not be a defaulter with any bank or financial institution
- For a Tarun Plus loan the borrower must have successfully repaid an earlier loan in the Tarun category
- No collateral or third party guarantee is demanded by the lender
Documents you need
- Aadhaar card and PAN card
- Passport size photographs
- Proof of business identity and address, such as registration certificate or licence
- Bank statement for the last six months
- Quotation of machinery or assets to be purchased, where applicable
- Caste certificate for SC, ST or OBC applicants where applicable
How to apply
- Prepare a simple business plan showing what you will do with the money and how you will repay
- Approach any bank, regional rural bank, small finance bank, NBFC or microfinance institution, or apply online at udyamimitra.in or the JanSamarth portal
- Fill the Mudra loan application form for the right category and attach your identity, address and business documents
- The lender appraises the proposal and sanctions the loan without asking for collateral
- Receive the amount as a term loan or as a Mudra card working capital limit and start repaying as scheduled
Frequently asked questions
What is the maximum loan amount under Pradhan Mantri MUDRA Yojana
The maximum loan amount is Rs 20 lakh under Tarun Plus category. For new borrowers, Shishu offers up to Rs 50,000, Kishor up to Rs 5 lakh, and Tarun up to Rs 10 lakh. Tarun Plus requires successful repayment of an earlier Tarun loan.
Who is eligible for MUDRA Yojana loan
Indian citizens running or planning a non-corporate, non-farm micro or small enterprise are eligible. The activity must be in manufacturing, trading, services or allied agricultural work. You must not be a defaulter with any bank or financial institution.
Is collateral required for MUDRA Yojana loan
No, MUDRA Yojana loans are completely collateral-free and do not require any third-party guarantee. The lender sanctions the loan based on your business proposal without demanding any security.
What documents are needed to apply for MUDRA loan
Required documents include Aadhaar card, PAN card, passport size photographs, proof of business identity and address, bank statements for last six months, and quotation of machinery if applicable. SC, ST or OBC applicants should provide caste certificate.
Where can I apply for Pradhan Mantri MUDRA Yojana loan
You can apply through any bank, regional rural bank, small finance bank, NBFC or microfinance institution. You can also apply online at udyamimitra.in or JanSamarth portal. Avoid agents as no middleman is authorised for these loans.
What is the difference between Shishu Kishor Tarun and Tarun Plus
Shishu covers up to Rs 50,000 for startups. Kishor is Rs 50,000 to Rs 5 lakh for growing businesses. Tarun is Rs 5 lakh to Rs 10 lakh. Tarun Plus is Rs 10 lakh to Rs 20 lakh and requires prior successful repayment of a Tarun loan.
Before you apply: confirm every date, fee and eligibility rule on the official website linked on this page. Public and Policy is an independent portal, not a government body, and details change without notice.
