MUDRA Loan

Micro Units Development and Refinance Agency (MUDRA) Loan under Pradhan Mantri Mudra Yojana (PMMY) can also be availed by women entrepreneurs at concessional interest rates (from selected/eligible Banks/NBFCs from RBI). Collateral-free business loans/MSME loans of amounts up to Rs. 10 lakhs offered by lenders under Mudra Yojana are categorised under 3 loan schemes named Shishu, Kishor, and Tarun. Let’s further discuss the Mudra Loan along with loan details, eligibility, benefits, documents required, and much more.

Features of Mudra Loan under PMMY – 2023

Nature of Loan	Term Loan, Working Capital Loan & Overdraft Facility
Purpose of Loan	To start a new business, enhance existing or meet working capital requirements and for business expansion purposes
Types of Mudra Schemes	Shishu, Kishor, and Tarun
Loan Amount under each scheme	Under Shishu Scheme: Up to Rs. 50,000 Under Kishor Scheme: Rs. 50,001 – Rs. 5,00,000 Under Tarun Scheme: Rs. 5,00,001 – Rs. 10,00,000
Interest Rate	As per the applicant’s profile and business requirements
Processing Fees	Nil, or 0.50% of the sanctioned loan amount
Collateral/Security	Not required by any lender
Repayment Tenure	From 12 months to 5 years, may exceed
Foreclosure Charges	Nil to nominal, as per the lender

Mudra Loan Categories

Below mentioned are the 3 exclusive loan categories offered under Mudra Yojana along with the offered loan amount and its usage:

• Shishu: Under the Shishu loan scheme, applicants can avail small business loans up to Rs. 50,000 to start their new business or to meet daily business requirements
• Kishor: Under the Kishor loan scheme, borrowers can avail working capital loans of amounts from Rs. 50,000 to Rs. 5 lakhs for their existing businesses and for expansion purposes
• Tarun: Tarun loan scheme can be availed by existing and established MSMEs wherein they can avail loans from Rs. 5 lakhs to Rs. 10 lakhs to meet day-to-day business requirements, such as buying equipment/machinery, raw material, goods, debt consolidation, paying salaries, etc.

Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs – 2023

Bank/NBFCs	Interest Rate
Axis Bank	14.95% - 19.20% p.a.	Apply Now
Bajaj Finserv	9.75% - 30% p.a.	Apply Now
Flexiloans	1% per month onwards	Apply Now
HDB Financial Services Ltd.	Up to 36% p.a.	Apply Now
HDFC Bank	10% - 22.50% p.a.	Apply Now
IDFC First Bank	10.50% p.a. onwards	Apply Now
Indifi	1.50% per month onwards	Apply Now
Kotak Mahindra Bank	16% - 26% p.a.	Apply Now
Lendingkart	12% - 27% p.a.	Apply Now
Mcapital	2% per month onwards	Apply Now
NeoGrowth Finance	19% - 24% p.a.	Apply Now
Tata Capital	12% p.a. onwards	Apply Now
UGRO Capital	14.90% p.a.	Apply Now

Click here to check Mudra Loan Interest Rates.

Eligibility Criteria

Applicants with a minimum age of 18 years and a maximum of up to 65 years are eligible to apply for Mudra loans. The applicant should have good repayment history and should not have defaulted on any previous loan EMIs or credit card payments.

Eligible Entities

Loans under the Mudra scheme of amounts up to Rs. 10 lakhs can be availed by the following business entities engaged only in the Services, Manufacturing, and Trading sectors:

• Individuals, Self-employed Professionals, Business Owners, and Women Entrepreneurs
• Startups and Micro, Small, and Medium Enterprises (MSMEs)
• Small Vendors/Shopkeepers, Retailers, Traders, Small Manufacturers, and Artisans
• Sole Proprietorships, Partnership Firms, Limited Liability Partnerships (LLPs), and other business entities

Benefits of Mudra Loan

• Collateral-free loans – No Collateral/Security is required from the borrower from any Banks/NBFCs
• Low-interest rates with Nil to nominal processing fees
• Concessional interest rates for women entrepreneurs
• Loans covered under Credit Guarantee Schemes from Govt. of India
• Can be used as Term loans, Working capital loans, and Overdraft facilities
• All Non-farm enterprises, i.e. Small or Micro firms engaged in income-generating activities can avail Mudra loans
• Mudra loans can also be availed by people belonging to SC/ ST/ Minority category at special interest rates by specific lenders

How to Apply for Mudra Loan – Offline/Online

By Visiting the Bank’s Branch – Offline

The application form is available at mudra.org.in, so you can download the form and fill in all the required details. Different banks may have slightly different application procedures. You must visit the nearest branch of the desired Bank from where you want to get the Mudra loan and submit the duly filled application form and complete the bank formalities.

By Applying Online

Secondly, you can also apply online on the bank’s official website by submitting the duly filled application form along with the required documents as specified by the lender. You can also visit the MUDRA’s official website:  www.udyamimitra.in and apply online.

Once the lender is satisfied with the submitted documents, then shall approve the loan and you may receive the loan amount in your mentioned bank account within 7-10 working days.

If in case you want an instant business loan or loan amount of more than Rs. 10 lakhs, then you can apply here and choose the best available loan product, as per your business requirements at the lowest interest rate.

Documents required

• Duly filled application with passport-sized photographs
• KYC documents of Applicant and Co-applicants: Passport, Voter’s ID card, Aadhar Card, Driving License, PAN card, Utility Bills (Water/Electricity Bills)
• Proof of belonging to a special category, such as SC/ ST/ OBC/ Minority, etc. (if applicable)
• Last 6 months’ bank statement
• Business address proof and Vintage proofs for existing enterprises
• Any other documents required by the Bank/NBFC

Note: The Mudra loan application form to be filled and submitted is separate in the case of Shishu, whereas similar in the case of Kishor and Tarun loan schemes.

List of Businesses covered under Mudra Scheme

Below mentioned is the list of businesses that are covered under the Mudra scheme to perform income-generating activities:

• Commercial Vehicle Finance: Mudra finance for Machinery/Equipment can be used to purchase commercial transport vehicles like tractors, auto-rickshaws, taxis, trollies, tillers, goods transports vehicles, 3-wheelers, e-rickshaws, etc.
• Service Sector Activities: Starting businesses of salons, gyms, tailoring shops, medical shops, repair shops, dry cleaning, photocopying shops, etc.
• Food and Textile Product Sector Activities: Various activities involved in the respective sector, such as papad, achaar, ice cream, biscuits, jam, jelly, and sweets making, as well as for agriculture produce preservation at the rural level
• Business activities for Traders and Shopkeepers: Setting up shops, service enterprises, trading and business activities, and non-farm income-generating activities
• Equipment Finance Scheme for Micro Units: Maximum loan up to Rs. 10 lakhs for the purchase of new and pre-owned equipment or machinery
• Agri-allied Activities: Activities related to businesses in agri-clinics and agribusiness centers, food & agro-processing units, poultry farming, pisciculture, beekeeping, sorting, livestock-rearing, grading, aggregation agro-industries, dairy, fishery, etc.

Note: Banks/NBFCs offer Mudra Loans to individuals, startups, MSMEs, entrepreneurs, or other businesses that are engaged only in the Services, Trading, or Manufacturing sectors.

Mudra Loans for Women Entrepreneurs

Mudra Yojana under PMMY encourages women’s entrepreneurship and for that Banks/NBFCs offer collateral-free business loans at reduced or concessional interest rates, especially for women borrowers. The maximum loan amount offered under Mudra Yojana for women entrepreneurs is up to Rs. 10 lakhs with a repayment tenure of up to 5 years. Women entrepreneurs can also apply for an SBI e mudra loan for a loan amount of up to Rs. 1 lakh. The Mudra loan eligibility for women remains the same, as stated for individuals and enterprises. Nil to Nominal processing fee and foreclosure fees is charged on the sanctioned loan amount for women entrepreneurs.

Mudra Card

Mudra card is a type of debit card that is issued to the borrowers of Mudra loans to meet their day-to-day business requirements. After Mudra loan approval, the lender opens a Mudra loan account for the borrower and issues a debit card along with it. The loan amount is disbursed in the bank account and further can be withdrawn from the total sanctioned amount in portions by borrowers, as per their business requirements.

MUDRA Card also helps in the digitalization of MUDRA transactions and creating credit history for the borrower. This card can be managed and operated across the nation for the withdrawal of cash from any ATM and can also make payment via any POS (Point of Sale) machine.

Helpline/Customer Care Numbers

S.N	National Toll-Free Numbers
1	1800-180-1111
2	1800-11-0001

Also, To check State Toll-Free Numbers for Pradhan Mantri Mudra Loan Yojana, Click here

Achievements under PMMY (FY 2022-2023)

Financial Year	2022-2023
No. of PMMY Loans Sanctioned	60827414*
Amount Sanctioned	Rs. 448386.60 crore*
Amount Disbursed	Rs. 442296.46 crore*

Source: https://www.mudra.org.in/ 

*Numbers depicted are provisional data as provided until 31st March 2023. 

FAQs

Q. How much time does it take for Mudra Finance to get approved?

Ans. Usually, it takes around 7-10 working days for Mudra loan approval by Private/Public Sector Banks and NBFCs.

Q. Do I need to submit any security/collateral with the bank to avail loan under Pradhan Mantri Mudra Yojana?

Ans. No, you are not required to submit any collateral or security with any financial institution to avail Mudra loan.

Q. Is ITR compulsory for Mudra Finance?

Ans. For existing businesses and salaried people, last year’s ITR is required to apply for business loans under Mudra Yojana.

Q. How can I check my Mudra loan status?

Ans. You can check your mudra loan status online by visiting the respective bank’s official website and checking via its e-mudra loan application status section.

Also Read: How to get a business loan in India

Q. Is there any special Mudra loan scheme for women?

Ans. Almost every eligible Bank or NBFC are allowed to offer Mudra loan for women entrepreneurs. The eligibility criteria remains the same for women borrowers and the interest rates shall vary from Bank to Bank and depend upon the applicant’s profile and business requirements.

Also Know: What are the best financial institutions for a woman to receive a small business loan?

Q. We own bakery shop and want to expand it. Can we avail Mudra Loan?

Ans. Yes, you can avail loan under the “Kishor” or ”Tarun” category of an amount up to Rs. 10 lakh to expand your business. Contact your nearest Bank and NBFC to know the application procedure.

Q. I have done a course on fashion design. I want to open my own boutique and develop my own brand. What help can MUDRA offer to me?

Ans. Mudra Yojana offers loans that can be used to start your own boutique. You can visit the nearest bank that offers Mudra loans with all the required documents to apply for a business loan. You can also visit the official website to download the application form and apply online. The maximum loan amount to borrow remains the same of Rs. 10 lakh.