Mudra Loan: Eligibility & How to Apply for Up to ₹20 Lakh
Quick answer: Pradhan Mantri Mudra Yojana (PMMY) gives collateral-free business loans up to ₹20 lakh to anyone running or starting a small non-farm enterprise — shops, tailoring, food stalls, transport, repair services, dairy/poultry. Apply free at any bank, or online via udyamimitra.in or JanSamarth. No collateral, no application fee, no agents.
Starting a business? See every loan and subsidy scheme you qualify for.
Check my eligibility on WhatsApp →Free · 1,500+ benefits · English, தமிழ் & हिन्दी · No app, no forms
The four loan categories
| Category | Loan amount | Typical use |
|---|---|---|
| Shishu | Up to ₹50,000 | Starting out — pushcart, sewing machine, small stock |
| Kishor | ₹50,001 – ₹5 lakh | Working capital and equipment for a running business |
| Tarun | ₹5 – 10 lakh | Established businesses expanding |
| Tarun Plus | ₹10 – 20 lakh | Borrowers who repaid a previous Tarun loan (added 2024) |
Eligibility criteria
- Indian citizen, generally aged 18–65
- Running or planning a non-farm income-generating micro/small enterprise — manufacturing, trading, or services. Allied agriculture qualifies: dairy, poultry, beekeeping, fishery.
- Total credit requirement up to ₹20 lakh
- Not a defaulter with any bank/financial institution; a reasonable credit history helps approval
- Individuals, proprietorships, partnerships, and small companies can all apply; women entrepreneurs get priority and often small rate concessions
Note: Mudra is a loan, not a grant — interest applies at the lender's rate, and you repay over 3–7 years. The scheme's benefit is no collateral (the government's CGFMU guarantee protects the lender) and wide access through banks, small finance banks, NBFCs, and MFIs.
How to apply
- Choose your category (Shishu/Kishor/Tarun/Tarun Plus) based on how much you need.
- Prepare your pitch: for anything above Shishu, lenders ask for a simple business plan or project report — what you'll buy, expected income, repayment plan.
- Apply:
- Online at udyamimitra.in or jansamarth.in (compare lenders, digital in-principle approval), or
- At any bank branch — public, private, small finance bank, or regional rural bank.
- Submit documents (below) and complete verification; Shishu loans are commonly sanctioned within about 7–10 working days.
- On approval you may receive a Mudra RuPay card — a debit card on the loan account for flexible working-capital withdrawals.
Documents needed
- Aadhaar and PAN
- Address proof and passport-size photos
- Business proof — registration/licence, Udyam registration certificate (free at udyamregistration.gov.in — get this first; many banks ask), or trade licence
- Bank statements (usually last 6 months)
- Quotation for machinery/items to be purchased (where applicable)
- Business plan/project report for Kishor and above
- Caste certificate if applying under reserved-category targets
Avoid the classic mistakes
- Never pay an "agent". Mudra loans have no middlemen — fee-charging fixers are scams.
- Don't inflate the ask. Banks reject vague, oversized requests; a specific, well-documented smaller loan approves faster.
- Keep your credit clean. Repay on time — a good PMMY track record is what unlocks Tarun Plus's ₹20 lakh.
- Stack your benefits. Street vendors should also check PM SVANidhi; manufacturers should compare PMEGP, which adds a capital subsidy. One eligibility check shows all of them.
Frequently asked questions
Who is eligible for a Mudra loan?
Citizens 18–65 running or starting a non-farm micro/small business (allied agriculture included), needing up to ₹20 lakh, with no loan defaults.
What are the categories?
Shishu (≤₹50k), Kishor (₹50k–5L), Tarun (₹5–10L), Tarun Plus (₹10–20L for past Tarun repayers). All collateral-free.
How do I apply?
Free at any bank branch or online via udyamimitra.in / JanSamarth with ID, business proof, bank statements, and a business plan for larger amounts.
Is the loan subsidised?
No interest subsidy — lender rates apply. The benefit is collateral-free credit with a government guarantee covering the lender.
Do I need an agent?
No. Banks process Mudra directly and free. Anyone charging to "arrange" a Mudra loan is defrauding you.
Loans, subsidies, insurance, pensions — see your full list in one free check.
Check my eligibility on WhatsApp →Free · 2 minutes · No app download
Sources: MUDRA (mudra.org.in), Udyamimitra, JanSamarth. Interest rates and processing vary by lender — confirm terms before borrowing. Last verified 5 June 2026.