Mudra loan: government-backed credit for micro businesses
The Pradhan Mantri Mudra Yojana (PMMY) was launched to provide institutional credit to micro enterprises that have historically been excluded from formal banking. Since 2015, over 40 crore Mudra loans have been disbursed across India.
Three Mudra loan categories
| Category | Loan range | For |
|---|---|---|
| Shishu | Up to ₹50,000 | First-time borrowers, micro traders, artisans |
| Kishore | ₹50,001 – ₹5 lakh | Businesses with 1–3 years of operations |
| Tarun | ₹5,00,001 – ₹10 lakh | Established micro businesses needing scale-up |
| Tarun Plus | ₹10 lakh – ₹20 lakh | Eligible Tarun borrowers with good repayment history |
Who should apply?
Mudra loans work well for:
- E-commerce sellers starting on Meesho, Flipkart, or Amazon who need working capital for inventory
- Home-based businesses — tailoring, food processing, beauty services, tuition
- Street vendors and retailers — fruit/vegetable sellers, kirana stores, tea stalls
- Artisans and craftspeople — weavers, potters, carpenters
How to apply for a Mudra loan
- Visit any scheduled commercial bank, MFI, or NBFC
- Fill Mudra application form (available at branches or via Udyamimitra portal)
- Submit: PAN/Aadhaar, business proof, bank statement for 6 months, UDYAM/GST if registered
- Loan disbursed to your bank account (Kishore/Tarun) or via Mudra Card (Shishu)
The Mudra Card (for Shishu loans) is a RuPay debit card linked to an overdraft account — draw as needed, pay interest only on what you use.