Pradhan Mantri Micro Units Development & Refinance Agency (MUDRA) Yojana provides collateral-free loans of up to 10 lakh to non-corporate, non- farm small and micro enterprises. It aims to promote entrepreneurship and financial inclusion by offering loans under categories like Shishu, Kishore, and Tarun based on the stage of business growth.
Benefits Offer Under the Scheme
- Collateral-free loans up to 10 lakh for micro and small non-farm businesses.
- Three loan categories based on business stage:
- Shishu (up to 50,000)
- Kishore (50,000-75 lakh)
- Tarun (75 lakh-10 lakh)
- Low or no processing fees (especially for smaller loans under Shishu).
- Flexible repayment terms based on income and business cycles.
- Access to formal credit for first-time entrepreneurs and small businesses.
- MUDRA Card (RuPay debit card) for easy withdrawal and working capital management.
- Support for women entrepreneurs, with many banks offering concessional interest rates.
- Promotes financial inclusion by bringing small businesses into the formal banking system.
Eligibility:
- The applicant must be an Indian citizen
- Should be a non-corporate, non-farm micro or small enterprise (e.g., shopkeepers, traders, manufacturers, service providers)
- The business must be income-generating and engaged in business activities (not agriculture as primary activity)
- Applicant should be above 18 years of age
- Must not be a defaulter to any bank or financial institution
- Should have a viable business plan or proposal for starting or expanding a business
- Existing small businesses, startups, and first-time entrepreneurs are also eligible
Application Details:
- Visit a bank, Micro Finance Institution (MFI), or Non-Banking Financial Company (NBFC)
- that offers MUDRA loans, or apply online through their official portal.
- Obtain and fill out the MUDRA loan application form (separate forms for Shishu, Kishore, and Tarun categories).
- Submit required documents, such as identity proof, address proof, business plan, and financial details.
- Provide details of the business (existing or proposed), including investment needs and expected income.
- The lender will verify the application and assess creditworthiness.
- Upon approval, the loan is sanctioned and disbursed to the applicant's bank account.
- A MUDRA Card (RuPay debit card) may be issued for easy access to working capital funds.
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