The Pradhan Mantri Mudra Yojana (PMMY) is a flagship initiative of the Government of India launched on 8th April 2015 by the Hon’ble Prime Minister.
Its objective is to “fund the unfunded” by providing affordable credit to small and micro enterprises, bringing them into the formal financial system.
Under this scheme, eligible borrowers can obtain loans of up to ₹10 lakh from:
- Public Sector Banks
- Regional Rural Banks & Cooperative Banks
- Private & Foreign Banks
- Micro Finance Institutions (MFIs)
- Non-Banking Financial Companies (NBFCs)
Eligibility
Any Indian citizen with a viable business plan for a non-farm, income-generating activity in sectors like manufacturing, trading, services, or processing, and whose credit requirement is below ₹10 lakh, can apply for a Mudra loan.
Types of Loans
The PMMY offers three categories of loans under MUDRA:
| Loan Type | Amount Range | Purpose |
|---|---|---|
| Shishu | Up to ₹50,000 | For startups or very small businesses |
| Kishor | ₹50,001 – ₹5 lakh | For growing businesses seeking expansion |
| Tarun | ₹5 lakh – ₹10 lakh | For established enterprises requiring larger funding |
🔹 At least 60% of total credit is allocated to the Shishu category.
🔹 There is no subsidy, except if linked to a government scheme offering capital subsidy.
Sectors Covered
The scheme supports a wide range of small business activities, including:
- Transport Sector: Purchase of autos, e-rickshaws, taxis, small goods vehicles, etc.
- Community & Personal Services: Saloons, gyms, boutiques, tailoring, repair shops, courier services, photocopying, and medicine shops.
- Food Processing: Papad, achaar, jam/jelly, sweets, bakery, catering, cold storage, ice-making, and similar units.
- Textiles: Handloom, powerloom, embroidery, zari work, garment design, stitching, and textile accessories.
Key Features
- No collateral required
- No processing fees
- Repayment tenure up to 5 years
- Applicant must not be a defaulter of any bank or financial institution
Application Process
Interested borrowers can apply at any nearby:
- PSU Bank
- Regional Rural Bank / Cooperative Bank
- Private or Foreign Bank
- MFI or NBFC
Approval is subject to the eligibility norms of the lending institution.
Documents Required
- Identity Proof: Voter ID / Driving Licence / PAN / Aadhaar / Passport
- Residence Proof: Utility bill, property tax receipt, voter ID, Aadhaar, passport, etc.
- Photographs: Two recent passport-size photos
- Quotation: Details and cost of machinery or equipment to be purchased
- Business Proof: Registration, licenses, or ownership documents
- Category Proof: SC / ST / OBC / Minority certificate (if applicable)
Related Resources
- [PMMY Loan Application Form & Document Checklist]
- [Banker’s Kit – PMMY]
Source: Micro Units Development & Refinance Agency Ltd. (MUDRA)
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