Mudra Loan

Under the aegis of Pradhan Mantri Mudra Yojana (PMMY), MUDRA has created products/ schemes. The interventions have been named ‘Shishu’, ‘Kishore’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to :

  • Shishu : covering loans upto 50,000/-
  • Kishor : covering loans above 50,000/- and upto 5 lakh
  • Tarun : covering loans above 5 lakh and upto 10 lakh

With an objective to promote entrepreneurship among the new generation aspiring youth, it is ensured that more focus is given to Shishu Category Units and then Kishore and Tarun categories.

Within the framework and overall objective of development and growth of micro enterprises sector under Shishu, Kishore and Tarun, the products being offered by MUDRA are so designed, to meet requirements of different sectors / business activities as well as business/ entrepreneur segments.

The funding support from MUDRA are of two types:

  • Micro Credit Scheme (MCS) for loans up to 1 lakh finance through MFIs.
  • Refinance Scheme for Commercial Banks / Regional Rural Banks (RRBs) / Small Finance Banks / Non Banking Financial Companies (NBFCs).


Mudra loan eligibility of the year 2020 is:

  • Indian Citizenship
  • Non-farm income generating activities
  • Applicant’s age should be 18 years minimum.
  • It must be start-up or business running in small basis.
    1. Small manufacturers
    2. Artisans
    3. Fruit and vegetable dealers
    4. Shopkeepers
    5. Individuals engaged with agriculture (livestock, poultry, pisci culture, etc.)
  • You need to give a business reason not a personal reason to get a loan.

Activities Covered:

Agriculture Start, establish or expand an agriculture-allied business such as an apiary, a poultry farm, a pisci culture business, a dairy farm, a livestock farm, etc.
Food Purchase of machinery or set up of business in making papad, jam and jellies, biscuit and bread, or selling of fruits and vegetables, etc.
Service Set up a salon, boutique, chemist shop, dry cleaning, photocopying facility, etc.
Textile Artisans who want to start, establish or expand a business in chikan work, zari work, embroidery, stitching, knitting, etc.
Transport Purchase of vehicles for carriage of passengers or goods such as e-rickshaw, small goods transport vehicle, taxi, auto-rickshaw, etc.

Rate of Interest:

It is still not clear about the interest rates which are being provided. Only one such information has been gathered, that all the banks, who are participating under the Mudra Bank Loan Yojana, will have the freedom of choosing their own interest rates, provided that it truly justifies the main scheme and concept of the Mudra Loan scheme for small business start-Up.

Tenure of Assistance:

MUDRA’s refinance assistance will be for a maximum tenor of 36 months which will also be aligned to terms of allotment of MUDRA funds by RBI from time to time.