No Subsidy is offered by Banks under Mudra Yojana.
Mudra Loan under Pradhan Mantri Mudra Yojana (PMMY), business loans or working capital loans are offered to individuals, self-employed professionals, business owners, entrepreneurs and MSMEs to meet their day-to-day business requirements and for business expansion purposes. However, there is no subsidy offered under Mudra Loan by any Bank, NBFC or financial institution.
MUDRA (Micro Unit’s Developments and Refinances Agency) loan scheme was launched under Pradhan Mantri MUDRA Yojana (PMMY) with an aim to offer financial support in form of credit facilities to non-corporate, non-farm small, and micro-enterprises. To avail the MUDRA loan, the applicants can approach the nearest Bank branch of selected and eligible Private and Public Sector Banks, NBFCs, Cooperative Banks, Regional Rural Banks, etc.
Also Read: How to Apply for SBI e–Mudra Loan
Types of MUDRA Loans
Based on the current stage of growth or development of an enterprise, the MUDRA loan is provided under three categories:
- Shishu: This loan scheme is best suited for businesses that are at the initial stage of their business or are looking to start one. The maximum amount offered under the Shishu loan is Rs. 50,000
- Kishor: For an individual who has already established his/her business, but needs additional funding to enhance his/her business can opt for the Kishor loan scheme. It offers a minimum loan amount of Rs. 50,000 and a maximum of Rs. 5 lakh
- Tarun: Tarun loan scheme covers business expenses ranging from a minimum of Rs. 5 lakh to a maximum of Rs. 10 lakh. However, this loan to has a certain norms and requirements to be fulfilled before getting the loan sanctioned
Must Read: How to apply for Mudra loan online

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Rate of Interest and Repayment period
The rate of interest offered by financial institutions under Mudra Yojana for its loan schemes named as Shishu, Kishor and Tarun shall vary from lender to lender and shall depend upon applicant’s profile and business requirements. The maximum repayment tenure offered by Banks is up to 5 years and may exceed as per business requirements and special cases.
Eligibility Criteria
This loan is available to applicants who comply with the specific guidelines under this loan:
- Age criteria: Min. 18 years and Max. 65 years
- Corporate entities are not eligible for the MUDRA loan
- MUDRA loans are not offered to companies involved with non-farm income generating activities
- Applicants with good repayment history and creditworthiness
- Applicant with no previous defaults with any bank
Also Read: Documents required to avail the Pradhan Mantri Mudra Loan

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Activities covered under MUDRA Scheme:
The primary objective of a MUDRA loan is to extend credit to Small and Medium Enterprises (SMEs) at all the stages of growth. To ensure this, the products offered under the MUDRA Yojana are designed in a way to suit and meet the requirements of various businesses. MUDRA loans are extended to cover the following activities:
- Transport vehicle: MUDRA Yojana extends credit under which purchase of transport vehicles for transport of goods and for personal use that will generate income. Vehicles such as auto-rickshaws, small trucks, three wheelers, passenger cars, taxis, etc. can be purchased
- Community, social and personal service activities: Businesses under the service industry such as salon, beauty parlour, gym, tailoring shop, clothing store, cycle, car, motorcycle garage, stationery store, phone booth, medicine store, local courier facilities, and so on can be started
- Food and processing units: Small and micro enterprises engaged in papad making, jelly and jam making, achaar making, ice making, buns and bread making, cold storages, small storages for preserving local agricultural produce, small canteens and door to door catering services and so on can be undertaken
- Textile sector: MUDRA Yojana provides support to enterprises engaged in traditional zari, chikan, zardozi and handmade embroidery as well as dyeing, printing, designing of apparels. Enterprises engaged in handloom, power loom, computerized embroidery etc. are also supported
Purpose of the MUDRA loans
- By financially including the lesser developed sections of the society, MUDRA Yojana is on the path of achieving not only the goal of providing credit to the small and micro-entrepreneurs but also in uplifting the other sections of the society
- The mission of MUDRA Yojana is to create an inclusive, sustainable based entrepreneurial culture that will boost employment and create opportunities in the market
- MUDRA Yojana also focuses on empowering women engaged in small and micro enterprises
- The micro financial institutions under MUDRA Yojana extend credit to micro and small women entrepreneurs with a lower rate of interest to encourage taking up of self-employment
- It also aims to promote business literacy that will help the micro entrepreneurs in running and managing their business more efficiently
The Pradhan Mantri MUDRA Yojana offers assistance to Small Scale Industries (SSIs) and entrepreneurs by offering loans at low rate of interests and also provide MUDRA cards with a pre-decided credit limit. Until now, there is no statement made by the Prime Minister or the Ministry State of Finance on a subsidy being provided on MUDRA loans.
There have been an immense growth in the demand for small business loans in the market and to cater to the diverse financial requirements of these businesses various new business loan schemes have been introduced. Despite all this, a major section of micro-enterprises is still unable to find funding for their businesses. To provide the financial support to such businesses MUDRA loans were introduced. These loans, through money, assist the micro-enterprises in entering the mainstream market.

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FAQs
Q. Is There Any Subsidy Under PMMY? If So, Details Thereof?
Ans. No, there is no subsidy offered for Mudra Loan under Pradhan Mantri Mudra Yojana (PMMY).
Q. What is the Mudra loan subsidy percentage offered by financial institutions?
Ans. There is no Mudra loan subsidy percentage offered under Mudra Yojana. Business loan amounts up to Rs. 10 lakh are offered at attractive interest rates by banks with no processing fees are offered under Mudra scheme.
Q. Is there any Mudra loan subsidy for people falling under SC/ST/OBC category?
Ans. No, there is no subsidy offered for SC/ST/OBC category