The Pradhan Mantri MUDRA Yojana (PMMY) was launched in 2015 to provide collateral-free loans to non-corporate, non-farm small and micro enterprises. It’s a lifeline for first-generation entrepreneurs who lack the credit history or assets required for traditional bank loans.
Three Loan Categories
Shishu (Up to ₹50,000)
For businesses in the very early stage or start-up phase. Documentation is minimal. Processing is quick. Suitable for: street vendors, small shop owners, home-based enterprises.
Kishore (₹50,001 – ₹5 Lakh)
For established enterprises seeking funds for expansion. More documentation required. Suitable for: small manufacturing units, service providers, small traders.
Tarun (₹5 Lakh – ₹10 Lakh)
For well-established businesses with demonstrated repayment capacity. Suitable for: growing businesses, retailers, service providers with proven track records.
Key Features
- No collateral required – loans are guaranteed by NCGTC (National Credit Guarantee Trustee Company).
- No processing fee for Shishu loans.
- Repayment tenure: Up to 5 years.
- Interest rate: Market-linked, typically 8–12% depending on the lending institution.
How to Apply
Apply at any scheduled commercial bank, regional rural bank, cooperative bank, NBFC, or MFI. You can also apply online through mudra.org.in with your business plan, ID proof, and address proof.
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