Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana (PMMY) is run by the Government of India through the Micro Units Development & Refinance Agency Ltd. (MUDRA) and the Department of Financial Services, Ministry of Finance. It was launched on 8 April 2015. Its purpose is to provide access to credit for non-corporate, non-farm small/micro enterprises engaged in manufacturing, trading and services (including allied agricultural activities) whose credit needs are below a specified limit. Your business as a micro or small entrepreneur can benefit because the scheme eases access to organised institutional credit without depending solely on large collateral or formal bank-loans.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Loan facility up to a specified ceiling: PMMY enables micro/small enterprises to access finance up to a limit – originally up to ₹10 lakh, and more recently up to ₹20 lakh under Tarun Plus category
Three/four categories: The scheme defines:
- “Shishu” up to ₹50,000,
- “Kishor” from above ₹50,000 to ₹5 lakh,
- “Tarun” from above ₹5 lakh to ₹10 lakh.
- A new category “Tarun Plus” up to ₹20 lakh for repeat borrowers was introduced.
Term loan and working capital: The scheme covers credit needs for business expansion, equipment purchase, working capital and marketing support for micro units.
Manufacturing, trading, services, allied activities: Businesses in non-farm sectors, including transport vehicles, food processing, allied agricultural services are eligible.
No collateral or third-party guarantee: Many lenders provide PMMY loans without requiring traditional collateral, making it easier for micro enterprises to access credit.

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Loan Quantum	Up to ₹ 20 lakh	Example: If your micro enterprise needs ₹ 12 lakh for purchase of machinery, under Tarun Plus you may approach for up to ₹ 20 lakh.
Categories / Growth Stages	Shishu (≤ ₹ 50,000), Kishor (> ₹ 50,000 to ≤ ₹ 5 lakh), Tarun (> ₹ 5 lakh to ≤ ₹ 10 lakh), Tarun Plus (> ₹ 10 lakh to ≤ ₹ 20 lakh)	Example: A new micro unit needing ₹ 40,000 falls under Shishu. One needing ₹ 4 lakh falls under Kishor.
Security / Collateral Requirement	Often no collateral / third-party guarantee required up to eligible limits	Example: As an MSME you may approach a bank for a PMMY loan of ₹ 3 lakh and the lender may approve without requiring full collateral under the scheme norms.

Eligibility Criteria

Who Can Apply:

Micro and small enterprises engaged in manufacturing, trading, or services.
Individuals, proprietary concerns, partnership firms, and micro-entrepreneurs.
Start-ups in non-farm, non-corporate sectors.

Who Cannot Apply:

Medium or large-scale industries.
Agricultural activities covered under farm credit schemes.
Applicants with existing defaults in loan repayment.

Documents Required

Identity proof of applicant/business owner.
Address proof of applicant.
Business registration/registration of enterprise .
Bank account statement of business or financial projections .
Business plan / purpose of loan .
KYC of business and relevant business documents.

Application Process for the Scheme

Option 1: Apply with Bullit

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: Small traders, women entrepreneurs, and startups seeking collateral-free finance.

Option 2: Apply via Official Bank Portal or Branch

Visit your nearest bank/NBFC/MFI branch.
Request the MUDRA loan application form.
Fill in personal, business, and financial details.
Submit required documents; the lender will verify eligibility.
Loan is sanctioned under Shishu, Kishor, or Tarun category.

Option 3: Apply Online through Udyam or Bank Portals

Go to and follow the “Apply Now” instructions.
Many banks allow online PMMY applications.

Frequently asked questions

What is the Pradhan Mantri Mudra Yojana interest rate?

The Pradhan Mantri Mudra Yojana (PMMY) interest rate is not fixed and varies by bank, applicant profile, and loan amount. Generally, interest rates are competitive and set as per RBI guidelines. You should check with your chosen bank for the current Mudra loan interest rate before applying.

Are there any restrictions on the type of business eligible for a Mudra loan?

Most non-farm, non-corporate micro and small businesses are eligible, but activities related to agriculture or those prohibited by law are generally not covered under PMMY.

Can existing businesses upgrade their loan category under PMMY as they grow?

Yes, as your business expands, you can apply for a higher loan category (from Shishu to Kishor or Tarun) by meeting the lender’s eligibility and documentation requirements.