The Pradhan Mantri Mudra Yojana (PMMY) was built to remove the biggest hurdle small business owners usually face when seeking credit: the need for collateral. Since 2015, it has been disbursed through different categories of lenders, including public and private banks, regional rural banks, small finance banks, NBFCs and microfinance institutions, and the application itself can be completed almost entirely online. Besides this, a borrower can also visit the branches of these lenders in person to seek guidance and submit the application for a MUDRA loan.
For micro entrepreneurs exploring collateral-free credit, PMMY is one part of a wider institutional financing ecosystem, alongside the financing and development support provided by institutions such as SIDBI.
The Characteristics of MUDRA Loans
- Non-farm but agri-allied sector
- Income-generating activities
- Collateral- and third-party-guarantee-free loans
MUDRA Loan Categories and Loan Amounts
The scheme is implemented by banks, NBFCs and MFIs under four categories:
| Category | Shishu | Kishore | Tarun | Tarun Plus |
|---|---|---|---|---|
| Amount | Up to ₹50,000 | ₹50,001 to ₹5,00,000 | ₹5,00,001 to ₹10,00,000 | ₹10,00,001 to ₹20,00,000 |
How to Apply for a MUDRA Loan Online
The government's dedicated portal for this is Jansamarth, built to route MUDRA loans and other government-backed MSME loan applications to willing lenders, rather than leaving an applicant to approach banks individually.
Individual applicants may visit the Jansamarth portal as well as the lender's own portal and apply for the loan accordingly. The loan is sanctioned by the respective lender based on their internal assessment, depending on the merit of the proposal and the supporting documents, as per their internal guidelines.
Understanding the Wider MSME Credit Ecosystem
For applicants comparing financing options, it is also useful to understand the wider MSME credit ecosystem. SIDBI supports the financing needs of MSMEs through a range of credit and development initiatives, while PMMY provides a specific route to loans.
Role of MUDRA Ltd. in PMMY
MUDRA Ltd., Mumbai refinances MUDRA loans generated by last-mile financiers, such as non-banking finance companies, microfinance institutions, banks, small finance banks and regional rural banks, which are in the business of lending to micro and small business entities engaged in manufacturing, trading and services activities, as well as agri-allied activities. It does not sanction loans under the Pradhan Mantri Mudra Yojana. There are no agents or middlemen engaged by MUDRA for availing such loans. Interested borrowers may also go through the FAQs on mudra.org.in/FAQ for more details.
Frequently Asked Questions About PM Mudra Loan
1. What is PM Mudra Yojana, and is collateral required?
PMMY, launched in 2015, offers collateral-free and third-party-guarantee-free loans for non-farm, income-generating activities, including agri-allied ones.
2. What are the MUDRA loan categories?
Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), Tarun (₹5 lakh to ₹10 lakh) and Tarun Plus (₹10 lakh to ₹20 lakh).
3. Can I apply for a MUDRA loan online?
Yes, through the Jansamarth portal or your chosen lender's website, or in person at a lender's branch.
4. Who sanctions a MUDRA loan?
The lender (bank, NBFC, MFI, etc.) sanctions it after its own assessment. MUDRA Ltd. only refinances these loans.
5. Do I need an agent to get a MUDRA loan?
No, MUDRA Ltd. does not engage any agents or middlemen. Apply directly through Jansamarth or a lender.
