Introduction
Pradhan Mantri Mudra Yojana (PMMY) was launched in April 2015 to provide collateral-free loans up to ₹10 lakh to small business owners, entrepreneurs, and self-employed individuals. Under this scheme, over ₹28 lakh crore has been disbursed across more than 50 crore loan accounts since inception. This article explains the three loan categories, eligibility criteria, and step-by-step application process.
Mudra Loan Categories
| Category | Loan Amount | Purpose |
|---|---|---|
| Shishu | Up to ₹50,000 | Start-up businesses, very small enterprises |
| Kishor | ₹50,001 to ₹5 lakh | Growing businesses, working capital |
| Tarun | ₹5,00,001 to ₹10 lakh | Established businesses, expansion |
Do I need collateral for a Mudra loan?
No, Mudra loans are collateral-free. No third-party guarantee is required. However, banks may assess your repayment capacity and business viability before sanctioning the loan.
What is the interest rate on Mudra loans?
Interest rates vary by bank and loan category, typically ranging from 8% to 14% per annum. Public sector banks generally offer lower rates. Compare rates across banks before applying.
How can I apply for a Mudra loan?
You can apply online through the Mudra portal (mudra.org.in) or visit your nearest bank branch. You need a basic business plan, KYC documents, and bank statements for the last 6 months.
Is there any subsidy on Mudra loans?
Mudra loans are regular loans at market interest rates. However, women entrepreneurs and SC/ST applicants may get a 0.5% to 1% interest concession from certain banks. There is no direct subsidy on the principal amount.