The Pradhan Mantri MUDRA Yojana (PMMY) provides collateral-free loans to micro and small non-farm enterprises through banks and NBFCs, in three categories based on loan size.
This guide explains the categories, eligibility and how to apply.
What is Mudra Loan (PMMY)?
Mudra loans fund manufacturing, trading and service micro-units. The three categories are Shishu (smallest loans), Kishore (mid-size) and Tarun (largest), with the scheme's ceiling enhanced over time.
No collateral is required, and the loans are routed through banks, NBFCs and MFIs.
| Shishu | Smallest loans (up to ₹50,000) |
|---|---|
| Kishore | Mid-size loans |
| Tarun | Largest category (up to the enhanced scheme ceiling) |
| Collateral | Not required |
Step-by-step process
- Prepare your plan. Put together a simple business plan and financials.
- Approach a lender. Apply at a bank, NBFC or MFI offering Mudra loans.
- Submit documents. Provide KYC, business proof and quotations/invoices as needed.
- Receive funds. On approval, the loan (or a Mudra card for working capital) is issued.
Frequently asked questions
Is a Mudra loan collateral-free?
Yes. Mudra loans under PMMY do not require collateral.
Who can get a Mudra loan?
Micro and small non-farm enterprises in manufacturing, trading or services.