Date: 24 May 2024

Pradhan Mantri MUDRA Yojana (PMMY) : Mudra Loan Eligibility, Interest Rate, Mudra Loan amount


Pradhan Mantri MUDRA Yojana (PMMY) is government financing scheme launched by Modi Govt. on April 8, 2015. The purpose of this scheme is providing loans up to Rs. 10 Lakh to small/Micro enterprises engaged in manufacturing, trading and services without any security. These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs. This loan is also called MUDRA Loan. These loans can be applied either online via or offline via visiting bank directly.

Products under Mudra Loan

Mudra loans have been classified under three categories to fulfil financing requirements of Micro enterprises as: 
Shishu - Loan upto Rs. 50,000/- 
Kishore – Between Rs. 50,001 to 5 Lakh
Tarun – Between 5, 00,001 to 10 Lakh

Who can apply for Mudra Loans i.e. Eligible Borrowers?

As mentioned above Mudra Loan is for micro enterprises. Following borrowers are eligible for mudra loans: 
•    Individuals 
•    Proprietary concern
•    Partnership Firm
•    Company (Private, Public and OPC)
•    Any other Legal Forms.

Nature of Mudra Loans

Mudra Loans can be term loan or Working capital loan (CC/OD) or composite loan based on the needs of borrowers. 

Term Loan: to be repaid in instalments 

Working Capital (CC/OD) Loan:  Working Loans are repayable on demand. Generally Renewal is done annually as per respective bank guidelines. 

Interest on Mudra Loan

Every bank has its own interest rate hence interest rate on Mudra Loan is charged as per each bank’s policy.

List of Documents Required for Mudra Loan application     

For Shishu Loan: 

•    Last 2 Years ITRs
•    MSME Registration 
•    Shop Act Registration
•    Basic KYC (PAN Card, Aadhar Card etc.) 

For Kishore and Tarun Loans: 

•    Basic KYC of Proprietor, Partners or Directors and of Enterprise  
•    Partnership Deed in case of Partnership Firm
•    Certificate of Incorporation of in case Company 
•    GST certificate if enterprise is registered with GST 
•    Project Report at least for 3 Years
•    Last 2 Years ITRs
•    Last 2 Years Financial statement 
•    Current year Provisional Financials
•    MSME Registration 
•    Shop Act registration if applicable 
•    Last 1 year GST Returns (GSTR 3B and GSTR 1) if registered with GST