Government SchemeActive in 2026

Govt. scheme · MUDRA

MUDRA Loan (Pradhan Mantri MUDRA Yojana)

Reviewed by Jay Patel· Last reviewed: 25 Apr 2026stale

Co-Founder & Chief Loan Advisor

Pradhan Mantri MUDRA Yojana (PMMY) provides affordable credit to micro and small enterprises that are often unable to access formal banking channels. Under MUDRA (Micro Units Development and Refinance Agency), loans are classified into three tiers — Shishu (up to Rs 50,000), Kishore (Rs 50,001 to Rs 5 Lakh), and Tarun (Rs 5,00,001 to Rs 10 Lakh). These loans are collateral-free, require no guarantor, and are available through all scheduled commercial banks, RRBs, MFIs, and NBFCs. Since launch, over 40 crore MUDRA loans worth Rs 23+ lakh crore have been sanctioned, with 68% going to women entrepreneurs.

MUDRA Categories & Benefits

Overview of all MUDRA loan categories with eligibility limits and key features.

Category	Max Amount	Interest Rate	Description
Shishu	Rs 50,000	10%–12% p.a.	For businesses in the nascent or startup stage. Covers initial working capital and equipment purchase. Interest rates are subsidised and typically lower than other categories.
Kishore	Rs 5 Lakh	11%–14% p.a.	For established micro enterprises seeking expansion capital. Can be used for inventory purchase, working capital augmentation, or minor equipment upgrades.
Tarun	Rs 10 Lakh	12%–16% p.a.	For well-established businesses ready to scale up significantly. Covers larger capital expenditure, expansion to new locations, or technology upgrades.

MUDRA Eligibility Criteria

Check if you qualify for MUDRA Loan (Pradhan Mantri MUDRA Yojana). These are the key eligibility requirements.

Who Can Apply

Indian citizen above 18 years of age
Any non-corporate, non-farm small/micro enterprise
Manufacturing, trading, services, or allied agricultural activities
Business should not be a defaulter with any bank or financial institution
Existing or proposed business with identifiable revenue model
No minimum turnover requirement for Shishu loans
Existing enterprises must have at least 1 year of operational history for Tarun loans
CIBIL score of 650+ preferred (not mandatory for Shishu)

Key Benefits

Collateral-free loans — no property or asset pledge required
No processing fee for Shishu loans at most banks
MUDRA Card facility for working capital management (like a business credit card)
Available at all commercial banks, RRBs, and MFIs — easy accessibility
Priority processing for SC/ST and women entrepreneurs
No minimum turnover requirement for initial Shishu loans

Documents Required for MUDRA

Keep these documents ready for a smooth application process.

Identity proof — Aadhaar card, PAN card, Voter ID, or Passport

Address proof — utility bill, rent agreement, or ration card

Business address proof — shop establishment certificate, utility bill, or rent agreement

Business plan or project report (especially for Kishore and Tarun)

Quotation of machinery/equipment to be purchased (if applicable)

Proof of business existence — GST registration, Udyam registration, or trade licence

Bank statements (6–12 months)

Passport-size photographs

Caste certificate (if applicable for priority processing)

Previous loan details (if any)

How to Apply for MUDRA — Step by Step

Money Matrix Hub guides you through every step of the process.

Identify the loan category (Shishu/Kishore/Tarun) based on your funding requirement

Prepare a brief business plan or project report outlining the business, fund usage, and repayment plan

Visit the nearest bank branch or apply through Money Matrix Hub for multi-bank comparison

Submit the MUDRA loan application form along with KYC and business documents

Bank evaluates the application, business viability, and credit history

Loan sanctioned and disbursed — Shishu loans are often sanctioned within 7–10 working days

MUDRA — Frequently Asked Questions

Answers to common questions about MUDRA Loan (Pradhan Mantri MUDRA Yojana).

Do I need collateral for a MUDRA loan?

No. MUDRA loans are completely collateral-free. Banks cannot ask for any property, gold, or asset pledge for loans up to Rs 10 Lakh under the PMMY scheme. This is one of the scheme's core design principles to help small entrepreneurs who lack assets.

What is a MUDRA Card and how does it work?

A MUDRA Card is a debit card-like instrument linked to your MUDRA loan account. It allows you to draw working capital as needed (similar to a credit facility) and repay when your business generates cash. This flexible draw-down facility is available for Shishu and Kishore category loans.

Can I get a MUDRA loan if I have a low CIBIL score?

For Shishu loans (up to Rs 50,000), banks are more lenient on credit score requirements. For Kishore and Tarun categories, a CIBIL score of 650+ is generally preferred. However, each bank has its own evaluation criteria, and a strong business plan can sometimes compensate for a lower score.

What businesses are not eligible for MUDRA loans?

MUDRA loans are not available for direct agriculture (crop loans, farm mechanisation), corporate entities, or large businesses. However, allied agricultural activities like food processing, agri-trading, and poultry are eligible. The focus is strictly on micro and small enterprises.

How long is the repayment tenure for MUDRA loans?

MUDRA loan repayment tenure typically ranges from 12 months to 5 years depending on the loan category and bank. Shishu loans usually have shorter tenures (1–3 years), while Tarun loans can extend up to 5–7 years. EMI starts after any applicable moratorium period.

Can I get a second MUDRA loan while the first is ongoing?

Yes, you can apply for a MUDRA loan top-up or a fresh loan in a higher category (e.g., upgrade from Shishu to Kishore) if your existing loan is well-serviced. Banks typically require at least 6–12 months of regular repayment before considering a top-up.

Apply for MUDRA in Your City

Click your city for location-specific guidance, local banks, and step-by-step application help.

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