Pradhan Mantri MUDRA Yojana is India’s flagship micro-credit scheme, set up as MUDRA (Micro Units Development & Refinance Agency) Ltd., under the Ministry of Finance to refinance lenders who serve micro and small enterprises.
It was inaugurated on April 8, 2015, to extend last-mile financing to entrepreneurs in manufacturing, trading, services, and allied agricultural activities, bridging the gap where traditional banking often falls short.
2. Loan Categories under Mudra Yojana
| Category | Loan Size | Target Stage |
|---|---|---|
| Shishu | Up to ₹50,000 | Seed and early stage |
| Kishore | ₹50,001 to ₹5,00,000 | Growth and development stage |
| Tarun | ₹5,00,001 to ₹10,00,000 | Expansion and consolidation stage |
Each category aligns with the beneficiary’s funding needs, encouraging graduation from Shishu to Kishore to Tarun as the enterprise scales.
3. Eligibility & Purpose for Pradhan Mantri Mudra Yojana
- Who Can Apply: Proprietorships, partnerships, LLPs, private limited companies in manufacturing, trading, services, and allied agriculture.
- Purpose: Working capital, term loans for business expansion, modernization, or purchase of machinery/assets.
- Lender Network: Commercial banks, Regional Rural Banks, Small Finance Banks, Cooperative Banks, NBFCs, and MFIs.
4. Margin Requirements & Pricing
- Margin: Nil for Shishu; 20 % for Kishore and Tarun (₹50,001–₹10 lakh).
- Interest Rate: Competitive pricing linked to the External Benchmark Lending Rate (EBLR). Rates start around 9.05 % p.a. and typically run at EBLR + 1.25 % to 1.75 %.
5. Repayment Tenure & Moratorium
- For Loans ≤ ₹5 lakh: Up to 5 years, including moratorium up to 6 months.
- For Loans ₹5–10 lakh: Up to 7 years, including moratorium up to 12 months.
- Product Variants: Term loans and dropline overdrafts offer flexibility in disbursement and repayment.
6. Processing & Other Charges
- Shishu & Kishore: Generally nil processing fee for MSE units; individual lender policies may vary.
- Tarun: Up to 0.50 % of loan amount plus applicable taxes, subject to bank/NBFC norms.
- Prepayment & Penal Charges: Most lenders waive prepayment charges; check specific lender terms.
7. How to Apply
Online via JanSamarth
- Visit the JanSamarth portal at www.jansamarth.in
- Register with Aadhaar, PAN, and bank details.
- Select “Pradhan Mantri Mudra Yojana” and complete the digital application.
- Upload KYC documents; receive in-principle approval digitally.
Offline at Lending Institutions
- Approach any bank/RRB/SFB/NBFC/MFI branch offering MUDRA loans.
- Submit identity, address, age, and business proof.
- Fill out the lender’s loan application form.
- Undergo appraisal; sign agreements and avail funds upon sanction.
8. Key Benefits
- Financial Inclusion: Unlocks credit for small entrepreneurs lacking collateral.
- Growth Catalyst: Fuels business expansion, job creation, and rural development.
- Affordable Credit: EBLR-linked rates ensure transparency and low overall cost.
- No Collateral: Loans are collateral-free up to ₹10 lakh.
- Ease of Access: Multiple channels—online portal and extensive branch network.
9. Conclusion
Mudra Yojana stands as a cornerstone of India’s push for inclusive growth, delivering timely, affordable credit to micro and small enterprises. By tailoring loan sizes, pricing, and tenures across Shishu, Kishore, and Tarun, PMMY ensures entrepreneurs at every stage can access working capital and term loans without collateral. Whether you’re a startup at inception or a growing unit eyeing expansion, Mudra Yojana provides a reliable financing partner—backed by government guarantee and seamless disbursal channels.
Disclaimer: Terms, interest rates, and fees vary by lender and date. Always verify current details with your chosen financial institution.
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