Pradhan Mantri MUDRA Yojana (PMMY)
What is MUDRA?
MUDRA stands for Micro Units Development & Refinance Agency Ltd., is a financial institution set up by Government of India for development and refinancing of micro unit enterprises.
- Launched on April 8, 2015, by government of India for providing loans up to 20 lakhs to the non-corporate, non-farm small/micro enterprises. (limit of 20 lakhs for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category).
- These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.
- The borrower also can apply online through the portal udyamimitra.in
- It Provides collateral-free loans to micro and small enterprises in manufacturing, trading, services, and allied agricultural activities.
- It aims to promote entrepreneurship and improves access to formal credit for small businesses.
Loan Categories
Category Laon limit Target Group Shishu Up to 50,000 New/start-up businesses Kishore ₹50,000 – ₹5 lakh Growing businesses needing working capital Tarun ₹5 lakh – ₹10 lakh Established businesses needing expansion Tarun plus ₹10 lakh – ₹20 lakh (for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category). Established businesses needing expansion.
Key Features
- Collateral-free loan: No need to pledge property or assets.
- Interest Rate: Varies by bank/NBFC, usually 10–12% per annum.
- Repayment Tenure: Flexible, up to 7 years.
- Application: Through banks, NBFCs, MFIs.
- Eligibility:
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- Non-corporate, non-farm small/micro enterprises.
- Entrepreneurs, shopkeepers, artisans, traders, service providers, and agri-allied businesses (like dairy, poultry, fisheries).
Benefits of MUDRA loan
- Encourages self-employment and small-scale entrepreneurship.
- Helps businesses avoid high-interest informal loans.
- Special focus on women entrepreneurs and SC/ST beneficiaries.
- Supports job creation in rural and semi-urban areas.
Frequently Asked Questions (FAQ)
What is the eligibility of persons for availing MUDRA loans?
Any Indian Citizen who has a business plan for a non-farm income generating activity such as manufacturing, processing, trading or service sector.
What kind of borrowers are eligible for assistance from MUDRA?
Non–Corporate Small Business Segment (NCSB) comprising of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
Is there any subsidy under MUDRA loan?
No; however, if the loan proposal is linked to some Government scheme, wherein the Govt. if providing capital subsidy, it will be eligible under PMMY also.
What is the loan limit in MUDRA loan?
Loans up to 20 lakhs.
Is there any security required in MUDRA loan?
Collateral free loan up to 20 lakhs.
See also…
NABARD Subsidy Scheme 2026
Animal Husbandry Infrastructure Development Fund (AHIDF)
PM Vishwakarma Yojana
PM SVANidhi- Objectives & Benefits