Pradhan Mantri Mudra Yojana: Benefits, Eligibility and Application Process

India, with its diverse and vast economic landscape, contains a number of micro, small, and medium enterprises (MSMEs) that form the backbone of the rural and semi-urban economies. These enterprises often face the challenge of obtaining formal credit systems, which limits their growth and sustainability. Addressing this gap, the Government of India launched the Pradhan Mantri Mudra Yojana (PMMY) on April 8, 2015, to encourage entrepreneurship at the local level.

This scheme will give a loan up to ₹10 lakh to non-corporate, non-farm small/micro businesses from Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, Micro Finance Institutions (MFIs), and Non-Banking Financial Companies.

The rate of interest is charged according to the bank’s policy, but the interest rate paid to final borrowers will be extremely reasonable. Banks could consider charging an upfront fee according to their own policies. Most banks remove the upfront fee/processing charges for Shishu loans (up to Rs. 50,000/-).

Who is eligible for Pradhan Mantri Mudra Yojana?

  • Individuals, Startups, Business Owners, Entrepreneurs, and MSMEs can apply for Mudra Loans under PMMY.
  • The applicant’s age should be between 18 and 65 years, with no criminal records and no default history with banks or financial institutions.
  • Companies in manufacturing, processing, trade, service, or any other field with a loan requirement of less than INR 10 lakhs are eligible.
  • To avail of the loan, the Indian Citizen will have to approach either an MFI, Bank, or NBFC. There is no middleman or agent used in this scheme. If anyone approaches under the context of an agent, be aware that he or she is a fraud.

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What are the benefits of this scheme?

The advantages of the program are organized into three distinct categories named ‘SHISHU’, ‘KISHOR’, and ‘TARUN’, each representing the growth phase or developmental stage and financial requirements of the beneficiary micro entity or entrepreneur.

  • Shishu: Gives loans up to Rs. 50,000/-
  • Kishor: Gives loans ranging from Rs. 50,001 to Rs. 5,00,000/-
  • Tarun: Gives loans ranging from Rs. 5,00,001 to Rs. 10,00,000/-

How to Apply for Pradhan Mantri Mudra Yojana?

  1. Go to the official website at
  2. Scroll down and click on Apply Now under the Mudra Loan tab.
  3. Select one of the categories: New Entrepreneur, Existing Entrepreneur or Self- Employed Professional
  4. Then Fill in your name, mobile number, and Email and click on generate OTP.

After Registration

  • Start by giving your personal and professional details as required in the application form.
  • If you need assistance with preparing project proposals or any other help, you can select from the available hand-holding agencies. If no help is needed, proceed by clicking on “Loan Application Center” and then on “Apply Now.”
  • Choose the type of loan you require, for instance, Mudra Sishu, Mudra Kishore, or Mudra Tarun.
  • Fill in details concerning your business such as the name of the business, and the nature of business activities, and then choose the industry type whether it’s Manufacturing, Service, Trading, or Agricultural allies.
  • Fill out other necessary details including director information, existing banking/credit facilities, proposed credit facilities, future financial estimates, and your preferred lender.
  • Make sure to attach all necessary documents such as ID proof, address proof, photograph, applicant’s signature, and proof of identity/address of the business enterprise.
  • Once you have filled in all the required information and attached the necessary documents, submit the application form.
  • After submission, an application number will be generated. Keep this number safe as it will be needed for future reference.

Necessary Documents for Sishu Loan

Documentation requirements may differ slightly depending on the lending institution and the specific details of the business. It’s advisable to check with the lending bank or institution for the most accurate list of required documents for the Mudra Shishu Loan under PMMY.

  • Proof of Identity – Provide a self-verified copy of identification documents such as Voter’s ID, Driving Licence, PAN Card, Aadhaar Card, Passport, or any government-issued photo ID.
  • Residence Verification: Recent bills like telephone or electricity bills (dated within the last two months), property tax receipts, Voter’s ID, Aadhaar Card, Passport, or Bank passbook/statement validated by bank officials, belonging to the Individual, Proprietor, or Partners. Alternatively, a Domicile Certificate or a certificate from a government authority, local Panchayat, or Municipality can also be provided.
  • Include two recent photographs (taken within the last six months).
  • Provide the quotation for the machinery or other items intended for purchase.
  • Details like the name of the supplier, specifications of the machinery, and the price of the machinery/items to be acquired.
  • Supply copies of licenses, registration certificates, or other pertinent documents that establish the ownership, identity, and address of the business unit.
  • If applicable, provide proof of belonging to a specific category like SC, ST, OBC, or Minority.

Required Documents for Kishore and Tarun Loan

  • Proof of identity – Provide a self-attested copy of any government-issued identification such as a Voter’s ID, Driving License, PAN Card, Aadhar Card, or Passport.
  • Proof of Residence- Submit a recent utility bill (telephone or electricity bill) or a property tax receipt from the last two months, or provide the Voter’s ID, Aadhar Card, or Passport of the Proprietor/Partners/Directors for address verification.
  • If applicable, proof of belonging to SC/ST/OBC/Minority communities.
  • Submit copies of relevant licenses, registration certificates, or other documentation that verifies the ownership, identity, and location of the business entity.
  • The applicant should have a clear banking record with no defaults in any Bank/Financial Institution.
  • If already operational, provide a statement of accounts for the last six months from the existing banker. For loan amounts of INR 2 Lakhs and above, provide balance sheets for the last two years and income tax/sales tax return documents.
  • For loan amounts of INR 2 Lakhs and above, submit projected balance sheets for one year in case of working capital requests, and for the loan tenure in case of term loans.
  • Include data on sales achieved during the current financial year up to the application submission date.
  • For the proposed project, provide a report containing details of technical and economic possibilities.
  • Submit the Memorandum and Articles of Association of the company or Partnership Deed of Partners, as applicable.
  • In the absence of a third-party guarantee, a statement of assets and liabilities from the borrower, including Directors and partners, may be requested to assess the net worth.

Official Website of PM Mudra Yojana:

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