The Government of India operates two powerful schemes that work together to support aspiring business owners across the nation. The Pradhan Mantri Mudra Yojana (PMMY) provides collateral-free loans up to Rs. 20 lakh through MUDRA, while PMKVY offers skill training to enhance entrepreneurial capabilities. This guide covers complete details about loan categories, interest rates, eligibility requirements, and the step-by-step application process for small entrepreneurs and startups seeking financial assistance.
- 1 Pradhan Mantri Mudra Yojana 2026 Overview
- 2 Mudra Loan Categories for Entrepreneurs
- 3 Mudra Loan Interest Rates by Banks
- 4 Selection Process for Mudra Loan Approval
- 5 How to Apply Online for Mudra Loan
- 5.1 Offline Application Method
- 5.2 Documents Required for Mudra Loan Application
- 5.3 Special Benefits for Women Entrepreneurs
- 5.4 PMKVY and Mudra Loan Connection for Startups
- 5.5 PMKVY Eligibility
- 5.6 Loan Utilization Purposes
- 5.7 Repayment Terms and Conditions
- 5.8 Important Links
- 5.9 Frequently Asked Questions
Pradhan Mantri Mudra Yojana 2026 Overview
| Particulars | Details |
|---|---|
| Scheme Name | Pradhan Mantri Mudra Yojana (PMMY) |
| Implementing Agency | Micro Units Development and Refinance Agency (MUDRA) |
| Launched On | 8th April 2015 |
| Maximum Loan Amount | Rs. 20 Lakh |
| Interest Rate | 8.85% p.a. onwards |
| Loan Tenure | 1 to 7 Years |
| Collateral Required | No (for loans up to Rs. 10 lakh) |
| Processing Fee | As per lending institution |
| Application Mode | Online and Offline |
| Official Website | mudra.org.in |
The scheme operates through Member Lending Institutions including Commercial Banks, Regional Rural Banks, Small Finance Banks, NBFCs, and Micro Finance Institutions across India.
Mudra Loan Categories for Entrepreneurs
| Category Name | Loan Amount | Target Beneficiaries |
|---|---|---|
| Shishu | Up to Rs. 50,000 | New micro enterprises in initial stage |
| Kishor | Rs. 50,000 to Rs. 5 Lakh | Growing businesses needing expansion funds |
| Tarun | Rs. 5 Lakh to Rs. 10 Lakh | Established units requiring higher capital |
| Tarun Plus | Rs. 10 Lakh to Rs. 20 Lakh | Large-scale micro enterprise expansion |
Each category serves different stages of business development, allowing entrepreneurs to progress from smaller loans to larger funding as their enterprise grows.
Mudra Loan Interest Rates by Banks
| Bank Name | Interest Rate | Maximum Tenure |
|---|---|---|
| State Bank of India | 8.85% p.a. | Up to 7 years |
| Bank of Baroda | 12.15% p.a. | Up to 7 years |
| Punjab National Bank | Linked to Base Rate | Up to 5 years |
| Bank of Maharashtra | 11.8% p.a. | As per bank discretion |
| Kotak Mahindra Bank | 10.30% – 11.75% | 1-3 years |
Note: Interest rates are subject to change based on bank policies and borrower credit profile.
Eligibility Criteria for Mudra Loan
Applicants must meet the following requirements to qualify for Mudra Loan for small entrepreneurs:
- Indian citizen with valid identity proof
- Engaged in non-corporate, non-farm small business activity
- Manufacturing, trading, or service sector enterprise
- Business should not be financed by any bank or financial institution previously for the same purpose
- Valid business plan or project report
Age Limit
- Minimum Age: 18 Years
- Maximum Age: 65 Years (varies by lending institution)
Age criteria may differ slightly between banks and NBFCs based on their internal lending policies.
Domicile Requirement
The applicant must be an Indian resident with a registered business address within India. Both existing businesses and new ventures qualify for loan assistance.
Selection Process for Mudra Loan Approval
The loan sanctioning follows a systematic evaluation process:
- Application Submission: Complete form with required documents
- Document Verification: Bank verifies identity, address, and business proofs
- Credit Assessment: Evaluation of repayment capacity and business viability
- Project Appraisal: Review of business plan or project report
- Loan Sanctioning: Approval based on eligibility and credit score
- Disbursement: Funds transferred to business account
No written examination or interview is required. The process focuses entirely on financial and business assessment.
How to Apply Online for Mudra Loan
Follow these steps to submit your application through the PSB Loans portal:
Step 1: Visit the official PSB Loans website at psbloansin59minutes.com
Step 2: Click on Login and select Register option
Step 3: Fill in personal details and complete the registration process
Step 4: Choose Mudra Loan from available loan products
Step 5: Click Apply Now and fill the application form completely
Step 6: Upload required documents including identity proof, address proof, and business documents
Step 7: Submit the application for bank processing
Step 8: Track application status through the portal dashboard
Step 9: Visit the assigned bank branch for final verification if required
Step 10: Receive loan disbursement upon approval
Offline Application Method
Step 1: Visit nearest bank branch or financial institution offering Mudra loans
Step 2: Collect the Mudra loan application form from the counter
Step 3: Fill the form with accurate personal and business information
Step 4: Attach all required documents with the application
Step 5: Submit the completed form to bank officials
Step 6: Bank processes and verifies the application
Step 7: Loan amount credited upon successful approval
Documents Required for Mudra Loan Application
Prepare the following documents before applying:
- Identity Proof: Aadhaar Card, PAN Card, Voter ID, or Passport
- Address Proof: Utility bills, Bank passbook, or Ration card
- Business Proof: Registration certificate, License, or GST certificate
- Passport-size Photographs: Two recent photographs
- Bank Statements: Last 6 months account statements
- Business Plan: Project report detailing fund utilization
- Quotation: For machinery or equipment purchase (if applicable)
Special Benefits for Women Entrepreneurs
MUDRA extends additional support to encourage women-led businesses:
- Interest Rate Reduction: 25 basis points concession on refinance rates for MFIs and NBFCs lending to women entrepreneurs
- Priority Processing: Faster loan sanctioning for eligible women applicants
- Flexible Terms: Customized repayment schedules based on business cash flow
PMKVY and Mudra Loan Connection for Startups
The Pradhan Mantri Kaushal Vikas Yojana complements Mudra loans by providing skill training to aspiring entrepreneurs. Candidates who complete PMKVY certification can use their skills certificate to strengthen loan applications.
| PMKVY Component | Benefit for Entrepreneurs |
|---|---|
| Short-Term Training | 150-300 hours of industry-relevant skill development |
| Entrepreneurship Training | Business management and financial literacy |
| Placement Assistance | Support for self-employment ventures |
| Certification | Government-recognized credential for loan applications |
PMKVY 4.0 targets training over 8 lakh candidates between 2022-2026 in skills including artificial intelligence, data science, and robotics.
PMKVY Eligibility
- Indian citizen aged 15 to 45 years
- Unemployed youth or school/college dropout
- Valid Aadhaar card and bank account
- Meet sector-specific criteria defined by Sector Skill Councils
Loan Utilization Purposes
Mudra loans can be used for various business activities:
- Purchasing machinery and equipment
- Working capital requirements
- Business expansion and renovation
- Inventory and stock purchase
- Setting up shops and trading units
- Service enterprise establishment
- Transport and logistics vehicles
Repayment Terms and Conditions
- Repayment tenure ranges from 1 to 7 years based on loan amount
- EMI schedule determined by anticipated business cash flow
- Shishu loans typically processed within 7-10 working days
- Higher category loans require longer processing time
- No prepayment penalty in most cases
Important Links
| Description | Website |
|---|---|
| MUDRA Official Portal | mudra.org.in |
| PSB Loans Portal | psbloansin59minutes.com |
| PMKVY Official Website | pmkvyofficial.org |
Frequently Asked Questions
What is the maximum loan amount under Mudra Yojana?
The maximum loan amount is Rs. 20 lakh under the Tarun Plus category. Different categories offer varying limits based on business requirements and stage of development.
Is collateral required for Mudra loan?
No collateral or security is required for loans up to Rs. 10 lakh as per RBI guidelines. This makes the scheme accessible to first-time entrepreneurs without assets.
What is the interest rate for Mudra loans?
Interest rates start from 8.85% per annum and vary depending on the lending institution, loan amount, and borrower’s credit profile. Banks determine rates based on internal policies.
How long does Mudra loan approval take?
Shishu loans are generally disbursed within 7-10 working days. Higher amount loans under Kishor and Tarun categories take longer depending on documentation and bank processes.
Can PMKVY certified candidates apply for Mudra loan?
Yes, candidates who complete PMKVY training can apply for Mudra loans to start their own business. The certification strengthens the application by demonstrating relevant skill acquisition.
Who can apply for Mudra loan?
Any Indian citizen above 18 years engaged in non-corporate, non-farm income generating activities including manufacturing, trading, and service sectors can apply for Mudra loans.
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