If you run a small shop, a food stall, a tailoring unit or a repair workshop — or you dream of starting one — the government has just made your loan journey easier. The Union Cabinet has extended the Mudra loan guarantee and the Stand-Up India scheme till 31 March 2031, with a combined backing of ₹9,111 crore.
This means banks can keep giving collateral-free loans to small businesses for five more years, and the guarantee fee they pay has also been cut. For you, that means easier access to credit without pledging your house or jewellery.
What did the Cabinet decide on 11 November?
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the continuation of two credit guarantee schemes on 11 November 2026. Union Minister Ashwini Vaishnaw announced the decisions after the meeting.
The Credit Guarantee Fund for Micro Units (CGFMU), which backs loans under the Pradhan Mantri Mudra Yojana, gets a ₹5,000 crore corpus and will run till 31 March 2031. The Stand-Up India scheme gets a ₹4,111 crore credit guarantee corpus for the same period.
How much loan can you get under Mudra?
Mudra loans are divided into four categories based on the stage of your business:
- Shishu — Up to ₹50,000
- Kishor — Above ₹50,000 and up to ₹5 lakh
- Tarun — Above ₹5 lakh and up to ₹10 lakh
- Tarun Plus — Up to ₹20 lakh (for borrowers who repaid a Tarun loan)
The guarantee fund covers Mudra loans of up to ₹20 lakh to micro enterprises, overdrafts of up to ₹10,000 on Jan Dhan accounts, and eligible self-help group loans of ₹10 lakh to ₹20 lakh. The government expects the extended facility to help banks give Mudra loans worth ₹12.6 lakh crore over the next five years.
What changes for borrowers?
The annual guarantee fee on Mudra loans has been reduced from 1% to 0.75%. A lower fee for banks means cheaper credit flow to small borrowers. The fund is operated by the National Credit Guarantee Trustee Company (NCGTC) and has been running since January 2016.
Since the Mudra scheme began, more than 60.36 crore loans amounting to ₹43.34 lakh crore have been sanctioned by banks and lending institutions (as of September 2026).
Who benefits from Stand-Up India?
Stand-Up India is for first-time entrepreneurs — women and Scheduled Caste/Scheduled Tribe entrepreneurs setting up a greenfield enterprise in manufacturing, services, trading or agriculture-allied activities. Eligible borrowers can get loans above ₹10 lakh and up to ₹1 crore.
The scheme aims to support at least 2,50,000 additional entrepreneurs by 2031. The guarantee covers 85% of the loan amount, with a standard guarantee fee of 0.50%. Every bank branch is expected to support at least one woman borrower and one SC/ST entrepreneur.
How to apply for these loans?
You do not apply to the government for the money directly — you approach your bank, NBFC or microfinance institution. The bank assesses your business plan and eligibility, and the guarantee fund protects the bank against default risk. A guarantee is not a grant, and not every application is automatically approved.
For Mudra loans, visit your nearest bank branch or https://www.mudra.org.in/. For Stand-Up India, visit https://www.standupmitra.in/ or your bank branch.
At a glance:
| Benefit | Collateral-free business loans continue till 2031 |
| Total backing | ₹9,111 crore (CGFMU ₹5,000 crore + Stand-Up India ₹4,111 crore) |
| Mudra loan range | ₹50,000 to ₹20 lakh (Shishu to Tarun Plus) |
| Stand-Up India loan | ₹10 lakh to ₹1 crore for women and SC/ST entrepreneurs |
| Valid till | 31 March 2031 |
| Fee | Mudra guarantee fee cut from 1% to 0.75% |
Read the Hindi version of this story here: https://www.viksitharyana.com/mudra-stand-up-india-cabinet-extension-2031/
For more Haryana government services and tools, see: https://www.viksitharyana.com/haryana-utility-tools/
Photo: PIB (File photo — PM Narendra Modi with Mudra Yojana beneficiaries, New Delhi, 2018)
Frequently Asked Questions:
Q: Till when have Mudra and Stand-Up India been extended?
A: Both schemes have been extended till 31 March 2031 by the Union Cabinet decision of 11 November 2026.
Q: How much loan can I get under the Mudra scheme?
A: Shishu loans go up to ₹50,000, Kishor up to ₹5 lakh, Tarun up to ₹10 lakh, and Tarun Plus up to ₹20 lakh for borrowers who have repaid a Tarun loan.
Q: Who can get a Stand-Up India loan?
A: Women and Scheduled Caste/Scheduled Tribe entrepreneurs setting up a first-time (greenfield) enterprise can get loans above ₹10 lakh and up to ₹1 crore.
Q: Is a Mudra loan free money or a grant?
A: No. It is a loan you must repay. The government guarantee protects the bank, not the borrower, and the bank decides on your application after assessing your business plan and eligibility.
