The Pradhan Mantri Mudra Yojana (PMMY), commonly known as the PM Mudra Loan Yojana, is one of the most impactful small business financing schemes launched by the Government of India. Designed to fund micro and small enterprises that have historically been excluded from formal banking channels, the scheme provides collateral-free loans ranging from ₹50,000 to ₹20 lakh through scheduled commercial banks, regional rural banks, NBFCs, and microfinance institutions.
Since its launch in 2015, the scheme has disbursed over 57.79 crore loans worth ₹40.07 lakh crore across India — making it one of the largest small business credit programmes in the world. In 2026, the scheme was expanded with the introduction of the Tarun Plus category, raising the maximum loan ceiling from ₹10 lakh to ₹20 lakh for eligible entrepreneurs who have previously repaid a Tarun loan. Women account for approximately 67% of all Mudra loan beneficiaries, and female applicants receive a concession of up to 0.25% on interest rates from select lenders.
Scheme Overview
| Particulars | Details |
|---|---|
| Scheme Name | Pradhan Mantri Mudra Yojana (PMMY) |
| Launched By | Government of India — Ministry of Finance |
| Launch Date | 8 April 2015 |
| Loan Range | ₹50,000 to ₹20,00,000 (₹20 lakh) |
| Collateral Required | None — fully collateral-free |
| Interest Rate | 8.85% to 12% per annum (varies by lender and category) |
| Repayment Period | 1 to 7 years depending on lender and loan type |
| Total Loans Disbursed | 57.79 crore loans worth ₹40.07 lakh crore since 2015 |
| Women Beneficiaries | Approximately 67% of all beneficiaries are women |
| Application Mode | Online via JanSamarth or UdyamiMitra portal; or offline at any bank branch |
| Official Portal | mudra.org.in / jansamarth.in |
Four Loan Categories — Shishu, Kishor, Tarun and Tarun Plus
The PM Mudra Loan Yojana is structured into four progressive categories, each designed to match a different stage of business development. Borrowers can move from one category to the next as their enterprise grows and repayment history strengthens.
| Category | Loan Amount | Business Stage | Interest Rate |
|---|---|---|---|
| Shishu | Up to ₹50,000 | New or early-stage businesses with minimal capital requirement | 10% – 12% p.a. |
| Kishor | ₹50,001 to ₹5,00,000 | Existing businesses seeking growth funding or working capital | 11% – 15% p.a. |
| Tarun | ₹5,00,001 to ₹10,00,000 | Established businesses requiring expansion or equipment upgrade | 12% – 16% p.a. |
| Tarun Plus | ₹10,00,001 to ₹20,00,000 | Entrepreneurs who have repaid a Tarun loan successfully — high-growth enterprises | As per lender policy |
Eligibility Criteria
| Condition | Requirement |
|---|---|
| Citizenship | Must be an Indian citizen |
| Age | Minimum 18 years — Maximum 65 years |
| Business Type | Non-farm, non-corporate income-generating activity in manufacturing, trading or services sector |
| Allied Agriculture | Poultry, dairy, beekeeping and fisheries are also eligible in 2026 |
| Existing Business | Both new startups and existing businesses are eligible |
| Loan Default | Must not be a defaulter with any bank or financial institution |
| Credit History | Good repayment history improves approval chances and interest rate offered |
| Women Entrepreneurs | Priority processing and up to 0.25% interest rate concession from select lenders |
| Tarun Plus Eligibility | Must have successfully repaid an existing Tarun category loan |
Documents Required
| Document | Purpose |
|---|---|
| Aadhaar Card | Primary identity proof — must be linked to active mobile number |
| PAN Card | Financial identity verification — mandatory for loans above ₹50,000 |
| Address Proof | Utility bill not older than 2 months, or Aadhaar with current address |
| Business Proof | Shop registration, trade licence, GST certificate, or Udyam registration |
| Bank Statement | Last 6 months’ statement of business or personal account |
| Passport Photograph | For loan application form and KYC record |
| Business Plan | Mandatory for loans above ₹5 lakh — should include projected revenue and expenses |
| Caste Certificate | For SC/ST/OBC priority consideration — if applicable |
| Existing Loan Repayment Proof | Required for Tarun Plus category applicants only |
How to Apply
The PM Mudra Loan can be applied for both online and offline. The online process through the JanSamarth portal is faster and allows comparison of lenders before submitting the final application.
- Visit jansamarth.in or mudra.org.in — the official government portals for PM Mudra Loan applications. Register using your mobile number and verify with OTP.
- Select your loan category — choose Shishu, Kishor, Tarun, or Tarun Plus based on your business funding requirement and stage.
- Fill the application form — enter your personal details, business information, annual turnover, loan amount required, and purpose of loan accurately.
- Upload required documents — Aadhaar, PAN, address proof, business proof, bank statements and business plan as applicable for your loan category.
- Choose your preferred lender — the portal shows a list of participating banks and NBFCs. Compare interest rates and select the most suitable option.
- Submit application and note reference number — after online submission, an application reference number is generated. Keep this for tracking.
- Bank verification and approval — the selected lender reviews your application, verifies documents, and may call you for a branch visit. Approval typically takes 15 to 30 working days.
- Loan disbursement — approved loan amount is credited to your registered bank account. A MUDRA RuPay Card is also issued for working capital drawdowns as needed.
MUDRA Card — What It Is and How It Works
Every Mudra loan borrower is issued a MUDRA Card — a RuPay debit card linked to a dedicated working capital loan account. Instead of receiving the entire loan amount as a lump sum, borrowers can draw funds as and when needed for business expenses. This reduces the overall interest burden significantly, as interest is charged only on the amount actually drawn and for the duration it is used.
| Feature | Details |
|---|---|
| Card Type | RuPay debit card on the MUDRA platform |
| Credit Limit | Up to ₹10 lakh (as per sanctioned working capital limit) |
| How It Works | Draw funds as needed — interest charged only on amount drawn |
| Benefit | Reduces total interest cost compared to drawing full loan at once |
| Repayment | Flexible — repay drawn amount to restore available credit limit |
Businesses Eligible for Mudra Loan
| Sector | Examples of Eligible Businesses |
|---|---|
| Manufacturing | Tailoring unit, food processing, handicrafts, pottery, furniture making |
| Trading | Grocery shop, vegetable vendor, clothing store, electronics retail |
| Services | Beauty parlour, repair shop, transport, laundry, coaching centre |
| Food & Beverages | Tea stall, tiffin service, bakery, restaurant, catering business |
| Allied Agriculture | Poultry farming, dairy, fisheries, beekeeping, agri-equipment rental |
| Digital Business | Freelancing, content creation, small tech services, printing shop |
Frequently Asked Questions
Is collateral or security required for a Mudra loan?
No. All four categories of PM Mudra Loan — Shishu, Kishor, Tarun, and Tarun Plus — are fully collateral-free. No property, gold, or fixed deposit needs to be pledged as security. The government’s Credit Guarantee Fund for Micro Units (CGFMU) provides the backing that allows lenders to sanction unsecured loans.
What is the interest rate on PM Mudra Loan in 2026?
Interest rates are not fixed by the government — they are set by individual lenders based on their MCLR and the applicant’s credit profile. Shishu loans typically range from 10% to 12% per annum, Kishor from 11% to 15%, and Tarun from 12% to 16%. Women entrepreneurs receive a concession of up to 0.25% from select lenders. UCO Bank currently offers rates starting from 8.85% p.a. — one of the lowest available.
Can a salaried person apply for a Mudra loan?
No. The PM Mudra Loan is exclusively for non-farm business activities. Salaried individuals without a business are not eligible. However, if a salaried person is also running a registered side business — such as a shop, home-based enterprise, or service unit — they may be eligible for the business loan component.
How long does Mudra loan approval take?
For Shishu loans, many banks aim for approval within 7 to 10 working days. Kishor and Tarun loans typically take 15 to 30 working days. Tarun Plus loans may take longer due to enhanced credit assessment. Applying online via the JanSamarth portal often speeds up the process compared to walk-in branch applications.
Can I apply for a second Mudra loan?
Yes. Existing Mudra borrowers who have repaid their loan successfully can apply for a second loan, typically in a higher category. Those who have repaid a Tarun loan can now apply under the Tarun Plus category for up to ₹20 lakh. A strong repayment record significantly improves approval chances and the interest rate offered by the lender.
Is there any subsidy on PM Mudra Loan?
No direct interest subsidy is provided under PM Mudra Yojana. However, the government’s credit guarantee backing through CGFMU reduces the risk for lenders, which in turn results in lower interest rates compared to unguaranteed business loans from the open market. Women and SC/ST borrowers may receive preferential rates from select institutions.
