What Mudra is
PM Mudra Yojana was launched in April 2015 to bring small businesses into formal credit. It is not a lender itself: banks, small finance banks, regional rural banks, NBFCs and microfinance institutions give the loans, and the government-backed Credit Guarantee Fund for Micro Units (CGFMU) guarantees them, which is why no collateral is needed.
The four categories
| Category | Loan amount | Who it is for |
|---|---|---|
| Shishu | Up to ₹50,000 | A new or very small business |
| Kishor | Above ₹50,000 up to ₹5 lakh | A business that is growing |
| Tarun | Above ₹5 lakh up to ₹10 lakh | An established small business |
| Tarun Plus | Above ₹10 lakh up to ₹20 lakh | Only those who took and fully repaid a Tarun loan |
Tarun Plus came from the Union Budget 2024-25 and was notified on 24 October 2024.
Who can apply
- Individuals, proprietorships, partnerships and companies running a non-farm, income-generating business in manufacturing, trading or services
- Activities allied to agriculture, such as dairy, poultry and beekeeping
- The business should not be a defaulter with any bank
Personal needs (a wedding, a phone, travel) are not covered. For those, a personal loan is the product.
Interest rate and charges
There is no single Mudra interest rate. Each lender sets its own rate within RBI rules, so it varies by lender and by your profile. Ask for the Key Fact Statement, which shows the rate, the APR and all charges before you sign (what a KFS is).
Documents usually asked for
- Aadhaar and PAN of the owner(s)
- Business proof: Udyam registration, GST certificate, shop licence or similar (Udyam registration guide)
- Bank statements of the last 6–12 months
- Quotations for machinery or stock you plan to buy
- For Kishor and above: income tax returns and simple financial statements, if you have them
How to apply
- Go to a bank, small finance bank, NBFC or MFI branch near you, or start online on the government's Udyamimitra portal.
- Fill in the application and attach the documents.
- The lender checks your business and credit history and decides the amount and the rate.
There are no agents or middlemen in Mudra; be careful of anyone who asks for money to get your loan approved.
Mudra or a regular business loan?
Mudra suits first loans and small amounts. If you need a larger amount, or a quick decision based on your bank statements, a regular business loan from banks and NBFCs may fit better. Read more in our Mudra loan guide.
Oxon Fintech is not a government agency and does not take applications for this scheme. Apply on the official portal or at a bank branch, and be careful of anyone who asks for money to get a scheme loan approved. Scheme rules change; check the official site before you apply.