PM Mudra Yojana: How to apply loan online, interest rate, criteria and more

The Modi government had in 2015 launched Pradhan Mantri MUDRA Yojana. Here, MUDRA stands for Micro-Units Development and Refinance Agency.

Under this scheme, the government provides loans up to Rs 10 lakh to non-corporate, non-farm small/micro enterprises. These loans are provided through commercial banks, Regional Rural Banks (RRBs), Small Finance Banks, Micro-Finance Institutions (MFIs) and Non-Banking Finance Companies (NBFCs).

MUDRA LOAN: How To Apply

A borrower can go to any of the branches of the banks (mentioned above) and apply for the loan. A borrower can also apply online by visiting udyamimitra.in

MUDRA LOAN: Eligibility

Any Indian citizen who is eligible to avail loan and has a business plan for income generating activity can apply for a MUDRA loan. The loan proposal should be for setting up a new/upgrading an existing Micro business enterprise in the manufacturing, processing, trading and service sector.

Any individual including women, proprietary concern, partnership firm, private limited company or any other entity is eligible for PMMY loans, whose loan requirement is up to Rs 10 lakh.

Bottom line is that a MUDRA loan is eligible for any activity which generates income.

However, it must be noted that the applicant should not be a defaulter of any bank or financial institution.

Types of MUDRA loans 

Shishu: Covering loans up to Rs 50,000
Kishor: Covering loans above Rs 50,000 and up to Rs 5 lakh
Tarun: Covering loans above Rs 5 lakh and up to Rs 10 lakh

Types of funding support from MUDRA:

Micro Credit Scheme (MCS) for loans up to Rs 1 lakh finance through MFIs.

Refinance Scheme for Commercial Banks / Regional Rural Banks (RRBs) / Small Finance Banks / Non Banking Financial Companies (NBFCs).

MUDRA: Mandatory documents and rules to enroll into scheme

Proof of Identity

Proof of Address

Proof of category of SC, ST, OBC, Minority if applicable

2 copies Applicant's photograph (not older than 6 months)

Quotation of machinery or other items to be purchased

Along with these documents, the applicant also has to submit the name of the machinery supplier, details of the machinery and its price.

For the business, the applicant has to submit proof of identity/address of the business along with all the necessary licenses/registrations/certificates etc.

Furthermore, MUDRA loans have neither processing fee nor collateral for the loans. Also, the loan taken can be repaid in 5 years.

What is MUDRA Card?

MUDRA Card, simply, is a debit card. The card is issued to the borrower against the MUDRA loan account. The card's limit is the working capital portion of the loan.

The borrower is allowed to use MUDRA card for withdrawals and credits to manage the working capital limit. The card helps in the digitalization of MUDRA transactions and creating credit history for the borrower. MUDRA Card can be operated across the country for withdrawal of cash from any ATM / micro ATM and also make payment through any ‘Point of Sale’ machines.

In FY 2022-2023, the provisional figures show that more than 1 crore MUDRA loans have been sanctioned while approving Rs 73,199 crore as of 8 July 2022. Out of this amount, Rs 68,879 crore has been disbursed to the beneficiaries.