Short Description
The Pradhan Mantri MUDRA Yojana (PMMY) is a flagship scheme launched in 2015 to provide "funding the unfunded" by providing collateral-free loans up to ₹20 lakh (increased from ₹10 lakh in 2024).
Objective
Financial Inclusion: Bring small businesses into the formal financial system.
Employment Generation: Support micro-entrepreneurs in creating self-employment opportunities.
Refinance Support: Provide a low-cost refinancing facility to banks and NBFCs for micro-unit lending.
The scheme is structured into four categories based on the growth stage of the business:
- Shishu: Loans up to ₹50,000 for startups and small vendors.
- Kishore: Loans from ₹50,001 to ₹5 lakh for scaling operations.
- Tarun: Loans from ₹5,000,01 to ₹10 lakh for established enterprises.
- Tarun Plus: Loans from ₹10 lakh to ₹20 lakh for entrepreneurs who have successfully repaid previous Tarun loans.
Benefits / Subsidy
Benefit Type
Finance Guarantee
Coverage
Collateral Free Loan
No Collateral: Loans are entirely unsecured; no property or third-party guarantee is required.
Lower Interest Rates: Interest rates are linked to the bank's cost of funds (EBLR) and are generally competitive.
MUDRA Card: A RuPay debit card is provided for Shishu and other working capital loans to allow multiple withdrawals as needed.
Repayment Flexibility: Loans can be repaid over a period of 5 to 7 years.
Eligibility
Borrowers: Indian citizens including individuals, sole proprietorships, partnerships, and private limited companies.
Sectors: Non-corporate, non-farm income-generating activities in Manufacturing, Trading, and Services, including allied agricultural activities like dairy or poultry.
Age: Applicants must be between 18 and 65 years old.
Clean Record: The applicant must not be a defaulter with any bank or financial institution.
Documents Required
Self-attested copy of Aadhaar, PAN, Voter ID, or Passport.
Proof of Residence Recent utility bills (electricity/phone), rent agreement, or bank passbook.
Business Proof Business license, registration certificates, or Udyam Registration.
Financial Records Last 6 months’ bank statement; for loans >₹2 lakh, last 2 years' balance sheets.
Project Details Project report (for Kishore/Tarun), quotations for machinery to be purchased.
Application Process
Offline: Visit a branch of any Commercial Bank, RRB, or NBFC (e.g., SBI, Punjab National Bank), fill out the PMMY application form, and submit with documents.
Online: Apply through the official Udyamimitra Portal or the JanSamarth Portal for faster processing.
Nodal Agency
The Micro Units Development and Refinance Agency (MUDRA) is the nodal agency. It operates as a wholly owned subsidiary of SIDBI. While MUDRA does not lend directly to individuals, it provides refinance to Member Lending Institutions (MLIs) that disburse the loans.
