The Central Government’s Pradhan Mantri Mudra Yojana (PMMY) gives collateral-free loans for small businesses and self-employment. The scheme began in 2015. Non-farm, non-corporate micro enterprises can get loans from ₹50,000 to ₹20 lakh. No security (collateral) has to be given — the loan is guaranteed by the Credit Guarantee Fund for Micro Units (CGFMU). A shop, tailoring unit, street stall, small workshop or service business — any small enterprise can take this loan.
The four categories — which one is for whom
Mudra loans come in four categories matched to the size of the business. Shishu — up to ₹50,000, for a brand-new or very small business. Kishore — ₹50,000 to ₹5 lakh, to grow a running business. Tarun — ₹5 lakh to ₹10 lakh, for an established micro enterprise expanding further. Tarun Plus — ₹10 lakh to ₹20 lakh, only for those who took a Tarun loan earlier and repaid it on time. Tarun Plus was added in the Union Budget 2024-25 — for a first-time borrower, the maximum is ₹10 lakh.
Where the loan comes from
It is important to understand that MUDRA itself is not a bank — it refinances the institutions that lend. The loan comes from a bank, NBFC or microfinance institution. The interest rate is set by the lender and your profile (usually between 8.5% and 12% a year). The loan can be used for working capital, machinery, shop stock or a vehicle.
How to apply
You can apply on the official portals udyamimitra.in or jansamarth.in, or by visiting your bank branch and filling the form. Getting Udyam Registration (udyamregistration.gov.in) first helps — it is free. Keep your business plan, past transaction records and identity documents ready. Note — nobody can guarantee a loan approval; if anyone asks for money claiming to “get the loan approved”, it is a fraud.
Know this before you apply
A Mudra loan approval depends on the bank’s assessment — the scheme’s name is not a guarantee of approval. Not repaying a loan harms your credit history and the bank will recover it. So borrow only as much as the business can repay. Starting small and repaying on time makes it easier to get a bigger category loan later.
Frequently Asked Questions
Q1: What are the four categories of Mudra loans?
A: Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh), Tarun (₹5–₹10 lakh) and Tarun Plus (₹10–₹20 lakh) — Tarun Plus is only for those who repaid a Tarun loan.
Q2: Is any security needed for the loan?
A: No — Mudra loans are collateral-free; the Credit Guarantee Fund gives the guarantee.
Q3: Where do I apply?
A: On udyamimitra.in or jansamarth.in, or at your bank branch. For information, see mudra.org.in.
Q4: Who gets a Tarun Plus loan?
A: Only those who took a Tarun loan earlier and repaid it with a clean record.
Useful links
- MUDRA official website: https://www.mudra.org.in/
- Udyami Mitra portal: https://udyamimitra.in/
- Mudra Yojana on MyScheme: https://www.myscheme.gov.in/schemes/pmmy
- Next Action: see all 726 Central Government schemes — https://www.viksitharyana.com/english/kendra-sarkar-ki-yojnayen-2/
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