What is the Pradhan Mantri Mudra Yojana?

The Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme launched by the Indian government in April 2015. The primary objective of this scheme is to provide financial support to micro-enterprises and promote entrepreneurship among small business owners, particularly those in the unorganized sector. "Mudra" stands for Micro Units Development and Refinance Agency.

Key features of the Pradhan Mantri Mudra Yojana:

Three Categories: The scheme categorizes loans into three categories based on the stage of business and funding requirements:

  • Shishu: Loans up to Rs. 50,000
  • Kishor: Loans ranging from Rs. 50,001 to Rs. 5,00,000
  • Tarun: Loans ranging from Rs. 5,00,001 to Rs. 10,00,000
  1. Target Beneficiaries: Small business owners, entrepreneurs, and individuals engaged in non-agricultural activities are the primary target beneficiaries.
  2. Participating Institutions: Various financial institutions, including banks, non-banking financial companies (NBFCs), and microfinance institutions, are involved in implementing the scheme.
  3. Collateral-Free Loans: The loans provided under PMMY are collateral-free, making it easier for individuals to access funds without the need for substantial security.
  4. Loan Purpose: The loans can be utilized for various purposes, including working capital requirements, purchasing equipment, tools, and machinery, and meeting other business-related expenses.
  5. Interest Rates: The interest rates for loans under the Pradhan Mantri Mudra Yojana may vary and are typically competitive, making it more accessible for small businesses.
  6. Refinancing Support: The scheme also provides refinancing support to financial institutions for lending to micro-enterprises.

How to take Pradhan Mantri MUDRA loan?

To apply for a Pradhan Mantri Mudra Yojana (PMMY) loan, you can follow these useful steps.

Visit a Participating Bank or Financial Institution:

  • Identify a bank or financial institution that is participating in the Pradhan Mantri Mudra Yojana. Most public sector banks, private banks, and some microfinance institutions are part of the scheme.

Understand the Loan Categories:

  • Determine the category of loan you require based on your business needs: Shishu (up to Rs. 50,000), Kishor (Rs. 50,001 to Rs. 5,00,000), or Tarun (Rs. 5,00,001 to Rs. 10,00,000).

Prepare the Required Documents:

  • Gather necessary documents such as identity proof, address proof, business plan, and any other documents required by the bank. The specific documentation may vary based on the loan amount and the bank's requirements.

Fill out the Application Form:

  • Obtain the application form from the bank or financial institution. Fill in the required details accurately. Include information about your business, the purpose of the loan, and the amount required.

Submit the Application:

  • Submit the completed application form along with the necessary documents to the bank. Ensure that all information provided is accurate and up-to-date.

Verification Process:

  • The bank will review your application and documents to assess your eligibility and the feasibility of your business. This may involve field visits and discussions with you to understand your business better.

Loan Approval:

  • If your application is approved, the bank will provide details about the loan amount, interest rate, repayment terms, and any other relevant terms and conditions.

Loan Disbursement:

  • Upon acceptance of the loan terms, the bank will disburse the loan amount to your bank account.


  • Repay the loan according to the agreed-upon schedule. The Pradhan Mantri Mudra Yojana aims to provide financial support to small businesses, and the repayment terms are usually flexible.

What is the age limit for Pradhan Mantri Mudra Yojana loan?

  • The minimum eligibility age is 18 years, and the maximum age is 65.

Who is eligible for Mudra?

  • Minimum age                                18 years
  • Collateral                                         No collateral or third-party security is required
  • Eligible Lending Institutions    Public Sector Banks, Private Sector Banks,                                                                    Regional Rural Banks, Micro-Finance                                                                            Institutions.
  • Documents                                         Identity proof, residence proof, application                                                                  form, and passport-size photos      

What is Mudra loan interest rate?

  • The interest rate on a Mudra loan starts at 8% per annum. There is a reduction of 25 basis points on interest rates to Micro Finance Institutions (MFIs) and NBFCs providing loans to women entrepreneurs. In the case of the working capital loan, banks charge interest rates only on the amount held overnight.

Can Farmers get MUDRA loan?

  • The primary objective of this scheme is to provide financial assistance to small and micro-enterprises, including those in the agriculture sector.


What are the maximum loan amounts under PMMY?

  • Loans up to Rs. 10 lakh are offered under PMMY across three categories: Shishu, Kishor, and Tarun.

Can Mudra loan be used to buy a commercial vehicle?

  • Yes, Mudra loans can be used for purchasing commercial vehicles for business purposes.

What action can be taken if Mudra loan application is rejected?

  • Applicants should seek feedback on the rejection and may approach other lenders or rectify the issues before reapplying.

How to get loan from Pradhan Mantri Mudra Yojana?

  • To get a loan under Pradhan Mantri Mudra Yojana, the applicant has to visit the nearest bank or financial institution and fill the Mudra Loan Application Form. Necessary documents have to be submitted along with the business plan. The bank reviews the application and decides on loan approval.

How to get Mudra Loan?

  • To get Mudra Loan in 2024, you must first apply for Mudra Loan in the nearest bank or financial institution with your business plan. Fill the application form and attach the required documents. The bank will evaluate your application and approve the loan.

How much is the interest in Mudra Loan?

  • The interest rate on Mudra Loan depends on the policies of the bank or financial institution and it usually starts from 8.5% and goes up. The interest rate also depends on the applicant's credit score, type of business and loan amount.

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