Key Highlights of Mudra Loan |
|
Loan Facility | Cash Credit, Overdraft & Term Loan |
Interest Rates | Depends on the bank’s policy decisions |
Loan Amount | Up to Rs 10 lakhs |
Tenure | Depends on the bank’s policy decisions |
Processing Fees | For Shishu category (loans up to Rs 50,000) – No processing fee |
For Kishore & Tarun category – depends on the financial institution |
Interest Rates of MUDRA Loans
MUDRA does not set the interest rates of PMMY loans. The agency has given freedom to lending institutions over setting interest rates of MUDRA loans. Thus, prospective borrowers planning to avail MUDRA loan should contact the concerned bank/NBFC/MFIs for their MUDRA loan interest rates.

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Features of PM Mudra Yojana
Loan Amount
MUDRA loans are categorised as ‘Shishu’, ‘Kishore’ and ‘Tarun’ to signify the development and funding needs of an applicant:
Category | Loan Amount |
Shishu | Up to Rs 50,000 |
Kishor | Above Rs 50,000 to Rs 5 lakh |
Tarun | Above Rs 5 lakh to Rs 10 lakh |
Collateral
The loans are collateral free and are covered under Credit Guarantee Fund for Micro Units (CGFMU) operated by National Credit Guarantee Trustee Company Limited (NCGTC).
Repayment Tenure
MUDRA has not specified any repayment tenure for the loans refinanced through the PMMY scheme. The agency has given a free hand to the lending institutions offering MUDRA loans to set their loan tenures as per their own rules and the regulations set by the RBI.
Types of Mudra Loan Facility
The loans under the PMMY scheme are offered in the form of term loan, overdraft and Cash Credit (CC).
Fees & Charges
The lending institutions providing MUDRA loans can consider charging of upfront fee as per their internal guidelines. However, most lenders waive the upfront fee or processing charges for loans under the Shishu category.

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Registration Process of PM MUDRA Yojana
Prospective business loan borrowers can visit designated Public and Private Sector Commercial Banks, Cooperative Banks, Regional Rural Banks (RRBs), Micro Finance Institutions, Foreign Banks and Non-Banking Finance Companies for availing loan under PMMY.
Individuals can also apply for MUDRA loans online through UdyamMitra portal – www.udyamimitra.in
Eligibility Criteria of PM MUDRA Loans
MUDRA loans are offered to micro enterprise sector in manufacturing, service, processing, sector or trading including activities allied to agriculture. The prospective borrower should not be defaulter in any bank or any financial institution and should have a satisfactory credit track record.
The educational qualification (if any) of an applicant can also be assessed depending on the nature of the proposed activity, and its requirement. Furthermore, applicants may be required to have the necessary experience or skills or knowledge to carry out the proposed activity.

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Eligible borrowers of PMMY
- Individuals
- Proprietary concern
- Partnership Firm
- Private Ltd. Company
- Public Company
- Any other legal forms
Eligible Activities covered under MUDRA Loans
Transport Vehicle
- Purchase of transport vehicles for transportation of goods and passengers such as auto rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, taxis, etc.
- Tractors/Power Tillers/Tractor Trolleys/Two Wheelers used only for commercial purposes
Community, Social & Personal Service Activities
Salons, gymnasium, boutiques, DTP and photocopying facilities, tailoring shops, dry cleaning, medicine shops, beauty parlours, cycle and motorcycle repair shops, courier agents, etc.
Food Products Sector
Papad making, biscuit/bread/bun making, jam/jelly making, ice cream making units, agricultural produce preservation at rural level, achaar making, cold storages, small service food stalls and day to day catering / canteen services, cold chain vehicles, ice making units, sweet shops, etc.
Textile Products Sector/Activity
Handloom, chikan work, traditional embroidery and hand work, computerized embroidery, traditional dyeing and printing, zari and zardozi work, powerloom, khadi activity, apparel design, knitting, cotton ginning, stitching and other textile non garment products such as vehicle accessories, bags, furnishing accessories, etc.
Business loans for Traders and Shopkeepers
- Loan to individuals for running their shops
- Trading and business activities/service enterprises
- Non-farm income generating activities with beneficiary
Equipment Finance Scheme for Micro Units
Individual setting up micro enterprises by purchasing required machinery or equipment, with per beneficiary
Activities allied to agriculture
Pisciculture, poultry, livestock-rearing, bee keeping, aggregation agro industries, food & agro-processing, diary, fishery, grading, sorting, agri-clinics and agribusiness centres, etc. and services supporting mentioned activities that which promote livelihood or are income generating. Crop loans, land improvement such as irrigation, canal and wells are excluded from the activities allied to agriculture.

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MUDRA Card
MUDRA Card is a RuPay debit card, which offers working capital loan in the form of an overdraft facility. The card allows multiple withdrawals and credits, digitalizing transactions and creating credit history for the borrower. MUDRA card is issued against MUDRA loan account and can be used across the country for cash withdrawals from ATM/micro ATM or make purchase using any Point of Sale (POS) machines. The borrower can repay the amount anytime, depending on the availability of surplus cash.
Documents required for availing PM MUDRA Loans
Documentation for availing loan under Shishu Category
- Identity Proof – Self attested copy of Driving Licence/PAN Card/Voter’s ID Card/ Aadhaar Card/Photo Ids issued by Govt. authority/Passport etc.
- Residence Proof – Latest telephone bill/property tax receipt (not older than 2 months)/ Voter’s ID Card/Electricity Bill/Aadhar Card/Domicile Certificate/Passbook of proprietor or partners or latest bank account statement attested by bank officials/Passport/ Certificate issued by local panchayat or government authority or or municipality etc.
- Recent photograph (2 copies) of an applicant, not older than 6 months.
- Quotation of Machinery or other items to be purchased
- Name of supplier or price & details of machinery and/or items to be purchased
- Proof of Identity and Address of the Business Enterprise – Copies of registration certificates/relevant licences/ other documents related to the ownership, address, identity of business unit, if any
- Proof of category like ST/ SC/OBC/Minority etc.

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Documentation for availing loan under Kishor and Tarun Category
- Identity Proof – Self certified copy of Voter’s ID card/ PAN Card/Aadhar Card/ Driving License/Passport
- Residence Proof – Latest telephone bill, Property tax receipt (not older than 2 months), Voter’s ID card, Electricity bill, Aadhaar Card and Passport of Proprietor/Partners/Directors
- Proof of ST/SC/OBC/Minority
- Identity/Address Proof of the Business Enterprise – Copies of registration certificates/relevant licenses/other documents related to the identity, ownership and address of business unit
- Account statement of the last 6 months from the existing banker, if any
- Balance sheet of the units of last 2 years along with income tax or sales tax return etc. (Applicable for all cases from Rs.2 lakhs and above)
- Projected balance sheets of 1 year in case of working capital limits and for the loan duration in case of term loan (Applicable for all cases from Rs.2 lakhs and above)
- Sales achieved during the current FY up to the date of submission of application
- Project report (for the proposed project) having details of economic and technical viability
- Articles and Memorandum of association of the Partnership Deed of Partners/company/ etc.
- In absence of third party guarantee, asset and liability statement from the applicant including directors and partners can be asked to know the net-worth.
- 2 photocopies of Partners/Proprietor/Directors

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FAQs on Mudra Loan
1. What is MUDRA loan yojana?
Ans. MUDRA Loan Yojana or Prandhan Mantri MUDRA Yojana is a government scheme for offering loans of up to Rs 10 lakh to micro enterprises through commercial banks, small finance banks, MFIs, RRBs and NBFCs.
2. How to apply for Shishu MUDRA loan online?
Ans. Prospective borrowers can apply online for a Shishu MUDRA loan through UdyamMitra portal – www.udyamimitra.in. Alternatively, borrowers can visit designated cooperative banks, RRBs, public & private sector commercial banks, foreign banks, micro finance institutions and NBFCs, which offer Shishu MUDRA loans online.
3. What is the repayment period in MUDRA loan?
Ans. Micro Units Development & Refinance Agency Ltd. (MUDRA) has not specified the repayment tenure of MUDRA loan. The lending institutions are free to determine the repayment tenure of their MUDRA loan borrowers based on the cash flow of their enterprise and the terms & conditions set by the of the lender.
4. How to apply for MUDRA loan for business?
Ans. Borrowers can apply for a MUDRA loan online by visiting UdyamMitra portal – www.udyamimitra.in or designated lending institutions offering loan online. Applicants can also visit the branches of designated cooperative banks, Regional Rural Banks (RRBs), public/private sector commercial banks, micro finance institutions, foreign banks and NBFCs for making MUDRA loan application.
5. What is the maximum limit of loan under MUDRA Yojana?
Ans. The maximum limit of MUDRA Yojana loan is Rs 10 lakhs.