PM Mudra Loan Yojana: Pradhan Mantri Mudra Yojana (PMMY), also known as PM Mudra Yojana, is a revolutionary initiative by the Government of India, launched on April 8, 2015. The main goal of this scheme is to provide financial assistance to people who wish to start their own businesses but lack the capital to do so. Whether you are a roadside vendor, a small shopkeeper, a housewife, or a youth looking for employment, you can avail a loan under the PM Mudra Yojana.

In the last decade, more than 52 crore loans have been sanctioned under this scheme, and over Rs 33 lakh crore has been distributed by the government. Now, let’s explore in detail what PM Mudra Yojana is, its benefits, and how you can apply to avail of its advantages.

What is PM Mudra Loan Yojana?

PM Mudra Yojana, also known as Pradhan Mantri Mudra Yojana (PMMY), is a significant financial initiative launched by the Government of India on April 8, 2015. Its purpose is to provide easy loans without any guarantee to small businessmen, shopkeepers, women, youth, and new entrepreneurs, helping them start or expand their businesses. Under this scheme, loans of up to ₹10 lakh are provided, which have recently been increased to ₹20 lakh. Loans are provided under various categories like Shishu, Kishor, Tarun, and the newly introduced “Tarun Plus” category.

Mudra Loan Categories and Loan Amount

Loans under the Mudra scheme are divided into four categories based on the entrepreneur’s needs:

Shishu Loan:

Loan amount: Up to ₹50,000

For those starting a small business for the first time, like a tea shop, vegetable cart, beauty parlor, etc.

Kishore Loan:

Loan amount: ₹50,000 to ₹5 lakh

Suitable for those who have already started a business and want to expand it.

Tarun Loan:

Loan amount: ₹5 lakh to ₹10 lakh

For entrepreneurs who want to expand an already established business, like a manufacturing unit, shop franchise, or e-commerce store.

Tarun Plus:

Loan amount: ₹10 lakh to ₹20 lakh

Newly added in the financial year 2024-25, this is for those who have repaid a previous loan of up to ₹10 lakh on time and now want to expand their business further.

Benefits of Pradhan Mantri Mudra Loan Yojana

The benefits of this scheme go beyond financial assistance, providing social and psychological advantages as well:

  1. No Guarantee Required: No collateral or security is required to take a loan, making it easier for small business owners.
  2. Mudra Rupay Card: Loan recipients are given a special Mudra debit card, which can be used to withdraw money from ATMs or POS machines for business needs.
  3. Overdraft Facility: Entrepreneurs can also access an overdraft facility through the Mudra card for working capital needs.
  4. Low Interest Rates: The interest rates under this scheme are relatively low, easing repayment for borrowers.
  5. Digital and Transparent Process: The application process is entirely online, which saves time and eliminates the need for intermediaries.
  6. Application Process: Step-by-Step Guide for Online Application

Here’s how you can apply online:

  1. Go to the official website of the Mudra Yojana.
  2. Create a new profile and fill in the required details.
  3. Choose the appropriate scheme (Shishu, Kishor, Tarun, or Tarun Plus).
  4. Select the nearest bank or financial institution where you want to apply for the loan.
  5. Verify the application using OTP sent to your mobile or email.
  6. Scan and upload the required documents.
  7. Save and submit the application form.
  8. The bank will review your application and approve the loan based on eligibility.

Required Documents

Make sure you have the following documents ready before applying:

  • Passport size photo
  • Aadhaar card
  • PAN card
  • Address proof (e.g., electricity bill, ration card)
  • Proof of business (e.g., GST number, trade registration certificate, shop license)
  • Bank account statement
  • Proof of any previous loan repayments

Eligibility Criteria

To apply for a Mudra loan, you must meet the following criteria:

  • You must be an Indian citizen.
  • You must be over 18 years of age.
  • You should be running a micro, small, or medium business or planning to start one.
  • A good credit score is essential.
  • You must fulfill any additional requirements set by the bank or financial institution.