PM Mudra Yojana (PMMY) gives collateral-free business loans up to ₹20 lakh to small entrepreneurs, shopkeepers, artisans and service providers. Loans are given by banks, NBFCs and microfinance institutions under four categories — Shishu, Kishor, Tarun and Tarun Plus. This guide shows how to apply online through the Udyamimitra portal or at your bank, with documents and practical tips to improve approval chances.
Mudra loan categories
| Category | Loan amount | Best for |
| Shishu | Up to ₹50,000 | New micro businesses, street vendors, home businesses |
| Kishor | ₹50,001 – ₹5 lakh | Running businesses needing working capital or expansion |
| Tarun | ₹5 – ₹10 lakh | Established businesses scaling up |
| Tarun Plus | ₹10 – ₹20 lakh | Borrowers who repaid a previous Tarun loan successfully |
Who can apply
- Indian citizen aged 18+ with a non-farm income-generating micro/small business — manufacturing, trading, services, or allied agriculture activities (poultry, dairy, beekeeping etc.)
- New and existing businesses both qualify
- No collateral required — loans are covered under the credit guarantee scheme
How to apply online (Udyamimitra portal)
- Visit udyamimitra.in and select Mudra Loan
- Register with your mobile number and fill the loan application
- Prepare and upload your business plan, KYC documents and financial details
- Choose preferred lenders — the portal forwards your application to matched banks
- Track the application through the portal and respond to the bank’s queries; the bank does final due diligence and sanctions the loan
Apply directly at a bank
You can also walk into any bank branch (public, private, RRB, small finance bank) with your documents and ask for a PMMY loan application. Many banks additionally accept Mudra applications on their own websites — for example through their MSME/Mudra loan sections. There is no agent and no fee for applying.
Documents required
- Identity & address proof — Aadhaar, PAN, Voter ID
- Business proof — registration certificate, Udyam registration, shop licence, or activity proof
- Bank statements (usually last 6 months) for existing businesses
- Quotation of machinery/goods to be purchased (for term loans)
- Passport-size photos; caste certificate if applying under a reserved category
Apply online free — no agents, no processing middlemen.
Tips to get approved
- Keep a simple, realistic business plan: what you sell, monthly sales, costs, and how the loan will be used
- Maintain a clean bank account history — bounced cheques and overdrafts hurt
- Start with the category matching your genuine need; asking for more than your cash flow justifies is the most common rejection reason
- A good CIBIL/credit score helps though the scheme is collateral-free
Frequently asked questions
What is the Mudra loan interest rate?
Rates are set by each lender based on RBI guidelines and your profile — typically starting around 9–12% per year. Compare 2–3 banks before choosing.
Is a Mudra card issued?
Yes — a RuPay Mudra card can be issued against the working-capital portion, letting you withdraw funds as needed like an overdraft.
Can women apply?
Yes, women entrepreneurs are a priority group under PMMY and many lenders offer concessional rates to them.
Related guides
Disclaimer: PMYojnaUpdates.com is an independent information portal, not affiliated with any government department. Always use the official site mudra.org.in for applications and status checks.