PM Mudra Yojana: How to Avail a MUDRA Loan and What Interest Rate to Expect

The Pradhan Mantri Mudra Yojana (PMMY) is a flagship government scheme designed to provide affordable financing to micro-enterprises across India. Managed by the Micro Units Development and Refinance Agency (MUDRA), the scheme offers collateral-free loans to micro-businesses in the manufacturing, trading, services, and agriculture sectors.

Types of MUDRA Loans and Amounts

MUDRA loans are divided into four categories based on the borrowing amount:

• Shishu: Loans up to ₹50,000.

• Kishor: Loans ranging from ₹50,000 to ₹5 lakh.

• Tarun: Loans from ₹5 lakh to ₹10 lakh.

• Tarun Plus: Loans from ₹10 lakh to ₹20 lakh.

Applicants can also obtain a MUDRA Card to meet working capital needs, withdraw cash from ATMs, and make payments through Point-of-Sale (POS) machines.

Interest Rates, Tenure, and Fees for MUDRA Loans

Interest rates under PMMY vary according to each bank or NBFC’s internal policies. Generally, interest rates are competitive and lower compared to typical business loans.

• Loan tenure:

  • Shishu category: Up to 5 years.

  • Kishor, Tarun, and Tarun Plus categories: Typically up to 3 years, depending on lender guidelines.

• Processing Fees:

  • Shishu category: No processing fee.

  • Kishor, Tarun, and Tarun Plus categories: Fees may apply as per the lender’s internal policies.

How to Apply for a MUDRA Loan

Borrowers can apply for MUDRA loans both offline and online:

• Offline: Visit any designated commercial bank (public or private sector), Regional Rural Bank (RRB), cooperative bank, microfinance institution (MFI), foreign bank, or NBFC to submit a loan application.

• Online: Applications can be made through the Udyamimitra Portal (www.udyamimitra.in), which simplifies the loan application process and facilitates quick approvals.

Eligibility Criteria for Availing a MUDRA Loan

To qualify for a MUDRA loan, applicants must meet the following requirements:

• Operate a micro-enterprise involved in manufacturing, trading, services, processing, or agricultural activities.

• Have a satisfactory credit history, with no defaults in any bank or financial institution.

• Possess adequate skills, knowledge, or experience relevant to the business activity.

• Educational qualifications may also be assessed depending on the nature of the business.

Collateral-Free Advantage and Credit Guarantee

A key feature of PM Mudra Yojana is that it offers collateral-free loans. These loans are backed by the Credit Guarantee Fund for Micro Units (CGFMU), managed by the National Credit Guarantee Trustee Company Limited (NCGTC), ensuring minimal risk for borrowers and lenders alike.

By providing accessible and affordable financing, PM Mudra Yojana continues to empower entrepreneurs and stimulate economic growth across India.