mudra loan

Prime Minister Narendra Modi started the MUDRA Loan initiative under the scheme of Pradhan Mantri Mudra Yojana to increase business and trade activities in the country. PMMY comes with a variety of offerings targeting a vast spectrum of beneficiary segments.

MUDRA stands for Micro Unites Development and Refinance Agency Limited. It is a Non-Banking Financial Company (NBFC) which supports the development of microenterprise sector in India. MUDRA provides finance and refinances support to Banks and Micro Finance Institutions to encourage lending to micro units a sum of up to Rs 10 lakhs.

Who Can Avail Mudra Loan?

MUDRA loan under the PMMY scheme can be availed for a variety of purposes that deals with income generation and employment creation. Any individual or company can avail the loan by visiting his nearest lending bank or finance company. Below activities are covered under MUDRA loan but are not limited to.

Transport Vehicle

Purchase of transport vehicles for goods and personal transport such as auto rickshaw, small goods transport vehicle, 3 wheelers, e-rickshaw, passenger cars, taxis, etc. Companies can avail a MUDRA loan to purchase vehicles for business purposes including activities like transportation, passenger commute, employees commute and others.

Community, Social & Personal Service Activities

Saloons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shop, DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc can avail loan under the PMMY scheme to increase their businesses and get a working capital. Individuals can also avail loan to start a company that deals in the above activities.

Food Products Sector

Activities such as papad making, achaar making, jam / jelly making, agricultural produce preservation at rural level, sweet shops, small service food stalls and day to day catering / canteen services, cold chain vehicles, cold storages, ice making units, ice cream making units, biscuit, bread and bun making, etc.

Textile Products Sector / Activity

Handloom, power loom, khadi activity, chikan work, zari and zardozi work, traditional embroidery and handwork, traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non-garment products such as bags, vehicle accessories, furnishing accessories, etc.

Business loans for Traders and Shopkeepers

Financial support for on lending to individuals for running their shops/trading & business activities/service enterprises and non-farm income-generating activities with a beneficiary loan size of up to 10 lakh per enterprise/borrower.

Activities allied to agriculture

‘Activities allied to agriculture’, e.g. pisciculture, beekeeping, poultry, livestock, rearing, grading, sorting, aggregation agro-industries, dairy, fishery, agriclinics and agribusiness centres, food & agro-processing, etc.(excluding crop loans, land improvement such as canal, irrigation and wells) and services supporting these, which promote livelihood or are income generating shall be eligible for coverage under PMMY in 2016-17.

Categories of Pradhan Mantri Mudra Yojana

The micro-units are further classified based on their growth stage, development and funding requirements. The three categories are as follows:

Shishu (child) Category: This category is for the start-ups that have just started out and are looking for a loan. Loan cover offered to this category of micro-units is Rs.50,000. It generally covers companies in the ideation stage and can be used to build a Minimum Viable Product and gain some initial traction.

Kishor Category: This is the category where the business has started but it is yet to be established. The loan cover offered to this category ranges from Rs.50,000 to Rs.5 lakh. It generally covers companies that have some initial traction and revenue and are looking to scale up their business activities.

Tarun Category: The business that has started and established themselves fall under this category. The loan might be to expand their business or to buy assets, etc. The loan cover offered to this category ranges from Rs.5 lakh to Rs.10 lakh. It generally covers companies that are growing and needs a working capital.

Eligibility criteria to avail Mudra Loan (Pradhan Mantri Mudra Yojana)

Proprietorship firms, Partnership firms, Private Limited Companies, Small Manufacturing Units, Small Scale Industries, Service Sector Units, Shopkeepers, Fruit Vendors, Vegetable Vendors, Truck Operators, Food Service Units, Repair Shops, Machine Operators Food Processors and several other industries are eligible to avail a MUDRA loan.

The only criteria that one must fulfil is having a good credit history. CIBIL score is checked before granting a loan under the MUDRA scheme. If your credit history is positive, no financial institution shall hesitate to provide you with a MUDRA loan under PMMY scheme.

Steps to Avail a MUDRA Loan

Step 1 – The borrower who wishes to take a loan under the Mudra scheme must visit the closest private or the commercial bank. Almost every commercial, whether it be government undertook or private, provides loans under PMMY scheme.

Step 2 – The borrower will have to present the business idea with the loan application form along with the other documents required to the bank officials. It is solely up to the discretion of bank official to approve a loan.

Step 3 – Borrower will then have to complete all the formalities as per the bank instructions. The formalities are similar to the formalities you have to complete while asking for a general personal loan that includes KYC, Credit History check and Crime History analysis.

Documents Required for MUDRA Loan

If the borrower wishes to take a vehicle loan under the Pradhan Mantri Mudra Yojana (Mudra Loan), he must submit the following documents:

  • The Pradhan Mantri Mudra Yojana application form that is duly filled.
  • The vehicle loan application form that is duly filled.
  • 2 passport sized photos of the borrower.
  • Photo identity proof and address proof and income proof.
  • Last 6 month’s bank statement.

If the borrower wishes to take a business instalment loan under the Pradhan Mantri Mudra Yojana, he must submit the following documents:

  • Pradhan Mantri Mudra Yojana application form and Business Instalment loan application form that is duly filled.
  • Photo identity proof and address proof.
  • Proof of establishment.
  • Last 6 month’s bank statement.
  • Ownership proof or office and residence.
  • Proof of continuity of business.
  • Qualification proof.
  • Trade references.

If the borrower wishes to take a Business Loans group and rural business credit under the Pradhan Mantri Mudra Yojana, he must submit the following documents:

  • Pradhan Mantri Mudra Yojana application form and Business Instalment loan or Rural Business Credit application form that is duly filled.
  • Photo identity proof, age proof and address proof.
  • Ownership proof of residence or office.
  • Business vintage proof.
  • Last 12 month’s bank statement.
  • Last 2 years Income Tax Return document.

Application Form Sample for MUDRA Loan


Which Banks and NBFCs provide MUDRA Loan?

SnoMudra Loan BanksInterest Rate
1State Bank of India (SBI)Not yet Known
2State Bank of Mysore (SBM)Not yet Known
3State Bank of Hyderabad (SBH)Not yet Known
4State Bank of Travancore (SBT)Not yet Known
5State Bank of Bikaner & Jaipur (SBBJ)Not yet Known
6State Bank of Patiala (SBP)Not yet Known
7Vijaya BankNot yet Known
8United Bank of India9.65% to 11.15%
9Union Bank of India9.65% to 11.15%
10UCO BankNot yet Known
11Syndicate BankNot yet Known
12Punjab & Sind Bank (PSB)Not yet Known
13Oriental Bank of Commerce (OBC)Not yet Known
14Indian Overseas Bank (IOB)Not yet Known
15Corporation Bank11% to 11.9%
16Central Bank of India (CBI)Not yet Known
17Canara BankNot yet Known
18Bank of Maharashtra (BOM)9.7% to 11.7%
19Bank of India (BOI)Not yet Known
20Bank of Baroda (BOB)Not yet Known
21Axis BankNot yet Known
22Andhra Bank9.75% to 11.5%
23Allahabad Bank9.7% to 11.7%
23ICICI BankNot yet Known

Note: All these interest rates are subject to change without notice from banks



MUDRA Card is an innovative product which provides working capital facility as a cash credit arrangement. MUDRA Card is a debit card issued against the MUDRA loan account, for a working capital portion of the loan. The borrower can make use of MUDRA Card in multiple withdrawal and credit, so as to manage the working capital limit in a most efficient manner and keep the interest burden minimum. MUDRA Card will also help in digitalization of MUDRA transactions and creating a credit history for the borrower.

National Payment Corporation of India (NPCI) has given RuPay branding to MUDRA Card and also separate BIN / IIN for the same, by which credit history can be tracked.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. The design of the MUDRA card as approved by DFS, GoI and NPCI is given below. Banks can customize the same by incorporating their logo and name.


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