PM Mudra Loan Yojana: The Pradhan Mantri Mudra Loan Yojana (PMMY) is one of India’s most impactful government schemes aimed at supporting small businesses, startups, and self-employed individuals. Launched in 2015, the scheme provides collateral-free loans to micro and small entrepreneurs to help them start or expand their businesses.
In 2026, PM Mudra Loan Yojana continues to play a vital role in promoting financial inclusion, employment generation, and entrepreneurship across urban and rural India.
What is PM Mudra Loan Yojana?
PM Mudra Loan Yojana is a government-backed scheme that offers loans up to ₹10 lakh to non-corporate, non-farm small businesses. These loans are provided through banks, NBFCs, microfinance institutions, and other financial bodies.
The objective of the scheme is to empower small traders, vendors, artisans, shopkeepers, women entrepreneurs, and startups by providing easy access to credit without any collateral.
Types of Mudra Loans
Under PMMY, loans are categorized into four segments based on funding needs:
1. Shishu Loan
- Loan amount: Up to ₹50,000
- Ideal for: New businesses, street vendors, small startups
2. Kishor Loan
- Loan amount: ₹50,001 to ₹5 lakh
- Ideal for: Growing businesses needing expansion
3. Tarun Loan
- Loan amount: ₹5 lakh to ₹10 lakh
- Ideal for: Well-established small businesses
4. Tarun Plus (introduced later)
- Loan amount: ₹10 lakh to ₹20 lakh (for eligible borrowers)
Key Features of PM Mudra Loan Yojana
- No collateral required
- No processing fee (in most cases)
- Loans available for manufacturing, trading, and service sectors
- Flexible repayment tenure
- Loans available through banks and online portals
- Special focus on women entrepreneurs
Benefits of PM Mudra Loan Yojana
- Encourages self-employment and startups
- Helps small businesses grow without financial pressure
- Supports rural and urban entrepreneurs equally
- Improves access to formal banking
- Boosts local economy and job creation
Women entrepreneurs also receive special benefits such as lower interest rates and priority processing in many banks.
Eligibility Criteria for Mudra Loan
To apply for a PM Mudra Loan, the applicant must:
- Be an Indian citizen
- Be a non-farm income-generating business
- Run a small business, shop, startup, or service unit
- Require funding up to ₹10 lakh
- Have a viable business plan
Individuals, partnership firms, proprietorships, and small enterprises are eligible.
Documents Required for Mudra Loan
The required documents may vary slightly by bank, but generally include:
- Aadhaar Card
- PAN Card
- Address proof
- Bank account statement
- Business proof or business plan
- Passport-size photographs
For higher loan amounts, income proof or GST registration may be required.
How to Apply for PM Mudra Loan Online
Follow these simple steps to apply online:
- Visit the official Mudra Loan or bank website
- Choose the loan category (Shishu, Kishor, Tarun)
- Fill out the online application form
- Upload required documents
- Submit the application
- Track application status through the bank
Alternatively, applicants can also apply offline by visiting their nearest bank branch.
Interest Rate and Repayment
- Interest rates vary depending on the bank and loan category
- Repayment tenure usually ranges from 3 to 5 years
- EMI options are flexible and affordable
Since Mudra loans are not subsidized, interest rates are decided by lending institutions.
Common Uses of Mudra Loan
- Opening a shop or small business
- Buying machinery or equipment
- Expanding an existing business
- Working capital needs
- Service-based businesses (salons, repair centers, transport, etc.)
Conclusion
The PM Mudra Loan Yojana is a powerful initiative that has transformed the lives of millions of small entrepreneurs in India. By offering collateral-free loans, easy application processes, and wide accessibility, the scheme encourages people to become self-reliant and financially independent.
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