Pradhan Mantri Mudra Yojana (PMMY) — Loan Scheme Guide (2026)

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of the Government of India launched in April 2015 to fund non-corporate, non-farm small and micro enterprises. Loans are extended through commercial banks, RRBs, small finance banks, MFIs and NBFCs without collateral.

Categories of MUDRA loans

• Shishu — Loans up to ₹50,000 for early-stage micro businesses
• Kishor — Loans from ₹50,001 to ₹5 lakh for established small businesses
• Tarun — Loans from ₹5 lakh to ₹10 lakh for growing enterprises
• Tarun Plus (2024 onwards) — Loans from ₹10 lakh to ₹20 lakh for businesses that have repaid earlier Tarun loans

Eligible business activities

• Small manufacturing units
• Service sector businesses — beauty parlours, salons, photo studios, tailoring
• Trading businesses including small shops, kirana stores
• Food service, restaurants, cloud kitchens
• Transport — auto-rickshaw, taxi, small commercial vehicle
• Agri-allied activities not covered under PM-Kisan Credit Card
• Repair shops, automobile repair, mobile repair

Documents required

• Aadhaar of applicant
• PAN card
• Address proof
• Photograph
• Business identity proof and address
• Bank statements (last 6 months)
• Quotation for machinery or equipment (for Kishor/Tarun)
• Caste, minority, woman entrepreneur certificate (for special category benefits)

How to apply

Visit any branch of a participating bank or apply online through the Jan Samarth portal (jansamarth.in) or the Udyamimitra portal (udyamimitra.in). Fill the MUDRA application form (Form 1 for Shishu and Form 2 for Kishor/Tarun), submit documents, and meet the branch credit officer. Sanction takes 7–30 days.

Interest rates and tenure

Interest rates vary by bank and category, typically 9% to 14% per annum. Tenure ranges from 3 to 5 years for working capital, up to 7 years for term loans. No prepayment penalties for floating rate loans.

Special focus on women entrepreneurs

Over 70% of MUDRA loans have been disbursed to women borrowers. Several banks offer concessional interest rates, lower margin requirements, and dedicated relationship managers for women entrepreneurs under MUDRA.

MUDRA card

Approved borrowers receive a MUDRA debit card linked to the loan account. The card can be used to withdraw the working capital portion of the loan as needed, similar to an overdraft facility. Repayment is interest only on the amount drawn.

Tracking application

Track your MUDRA application status on Udyamimitra or directly with the lending bank. Maintain communication with the branch credit officer for faster processing. The Mudra portal also publishes monthly state-wise disbursement statistics.