The Pradhan Mantri Mudra Yojana (PMMY) is one of the most popular schemes launched by the Government of India under the Ministry of Finance. Introduced in 2015, this scheme provides collateral-free loans to micro and small entrepreneurs for income-generating activities in manufacturing, trading, and services sectors. With the motto “Fund the Unfunded”, the scheme is designed to support small business owners, startups, self-employed professionals, and individuals who lack access to formal banking credit.
Overview of PM Mudra Yojana 2025
- Scheme Name: Pradhan Mantri Mudra Yojana (PMMY)
- Launched By: Government of India (Ministry of Finance)
- Launch Year: 2015
- Objective: Providing collateral-free business loans to small entrepreneurs
- Loan Amount: Up to ₹20 Lakh
- Target Group: Small businesses, traders, service providers, manufacturing units, startups
- Loan Categories: Shishu, Kishore, Tarun, Tarun Plus
- Eligible Institutions: Banks, NBFCs, MFIs, RRBs, SFBs
- Collateral Security: Not Required
Objectives of Pradhan Mantri Mudra Yojana
- To provide easy and collateral-free credit to small entrepreneurs.
- To promote financial inclusion by funding micro units and small businesses.
- To generate self-employment opportunities and boost the MSME sector.
- To encourage women entrepreneurs, artisans, and rural businesses.
- To support economic growth through job creation and entrepreneurship.
Loan Categories Under PMMY
The Mudra Yojana loans are categorized based on the stage of the business and financial requirements.
- Shishu: Loans up to ₹50,000 for small businesses/startups in the initial stage.
- Kishore: Loans from ₹50,001 to ₹5 Lakh for growing businesses needing more capital.
- Tarun: Loans from ₹5 Lakh to ₹10 Lakh for well-established businesses looking to expand.
- Tarun Plus: Loans up to ₹20 Lakh for entrepreneurs who have successfully repaid Tarun category loans.
Eligibility Criteria
Any Indian citizen engaged in income-generating activities can apply for a Mudra loan.
- Individuals, Proprietorship firms, Partnership firms, Private Ltd. Companies, and Public Companies can apply.
- The applicant should not be a defaulter to any bank or financial institution.
- Applicants must have a satisfactory credit history.
- Entrepreneurs should possess necessary skills/knowledge related to their business activity.
- Educational qualifications (if required) depend on the nature of business activity.
Documents Required
For Shishu Loan (Up to ₹50,000)
- Identity Proof – Aadhaar Card, PAN, Voter ID, Passport, Driving License
- Residence Proof – Utility Bills, Ration Card, Aadhaar, Passport, Property Tax Receipt
- Recent Passport Size Photographs
- Quotation of Machinery / Equipment to be purchased
- Business Proof – Registration/License (if available)
For Kishore, Tarun & Tarun Plus Loans
- Identity Proof & Residence Proof (as above)
- Business Proof – GST Registration, License, Shop Act, etc.
- Bank Account Statements (last 6 months)
- ITR/Balance Sheet (for loans above ₹2 Lakh)
- Business Plan / Project Report
- Partnership Deed / MOA / AOA (for firms & companies)
Interest Rates and Charges
- Interest rates are decided by respective banks as per RBI guidelines.
- Generally, Mudra loans carry interest between 8% – 12% per annum.
- No collateral security is required.
- No processing fee for Shishu loans.
- Nominal processing fees may be charged for Kishore & Tarun loans.
How to Apply for Pradhan Mantri Mudra Yojana Loan
Online Application Process
- Visit the official Udyamimitra Portal.
- Select “Apply Now” under Mudra Loan section.
- Choose your category – New Entrepreneur / Existing Entrepreneur / Self-employed Professional.
- Register with Name, Mobile Number & Email ID → Verify with OTP.
- Fill Personal, Business & Loan details.
- Upload necessary documents (ID, Address proof, Business Proof, etc.).
- Submit the application – An Application Number will be generated.
Offline Application Process
- Visit your nearest Public/Private Sector Bank, NBFC, or MFI.
- Ask for the MUDRA Loan Application Form.
- Fill the form and attach required documents.
- Submit to the branch officer for verification.
- Loan gets sanctioned after eligibility check and verification.
Key Benefits of Pradhan Mantri Mudra Yojana
- Collateral-free loans up to ₹20 Lakh.
- Encourages women entrepreneurship with additional benefits.
- Simple documentation and fast loan processing.
- Low interest rates compared to private loans.
- Supports startups, small traders, artisans, and allied agricultural activities.
- Helps in creating self-employment and boosting the local economy.
Growth and Achievements of Pradhan Mantri Mudra Yojana
Since its launch in 2015, the Pradhan Mantri Mudra Yojana has sanctioned loans worth more than ₹25 Lakh Crore to over 40 crore beneficiaries. The scheme has become a backbone of India’s micro-entrepreneurship ecosystem, especially benefiting women entrepreneurs, rural artisans, and first-time business owners.
Frequently Asked Questions (FAQs)
1. Is Khadi activity eligible under PMMY loans?
Yes, Khadi and village industry activities are eligible.
2. Can I get a Mudra loan for purchasing a CNG taxi/tempo?
Yes, vehicles for commercial purposes are covered under the scheme.
3. I have only a Savings Account in a bank. Can I apply for Mudra Loan?
Yes, having a savings account with a bank is enough to apply.
4. What is the loan processing time for Shishu Loans?
Generally, it takes 7–10 working days after submission of all documents.
5. Do I need to submit ITR for a ₹20 Lakh Mudra Loan?
Yes, for loans above ₹2 Lakh, ITR and financial statements are mandatory.
Sources and References
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