Starting a new business or expanding an existing one often requires substantial funding, which many aspiring entrepreneurs struggle to arrange. Recognizing this challenge, the Government of India introduced the Pradhan Mantri Mudra Yojana (PMMY) to provide easy, collateral-free loans to small business owners and budding entrepreneurs. In 2025, the scheme continues to empower millions by offering loans up to ₹20 lakh.
In this article, we will explain everything you need to know about PM Mudra Yojana, how to apply, eligibility, required documents, and answer some of the most frequently asked questions.
Short Summary Table: PM Mudra Yojana 2025
| Particulars | Details |
|---|---|
| Scheme Name | Pradhan Mantri Mudra Yojana (PMMY) |
| Loan Amount | ₹50,000 to ₹20 lakh |
| Loan Categories | Shishu, Kishor, Tarun, Tarun Plus |
| Eligibility | Small business owners, startups, MSMEs |
| Documents Required | Business plan, ITR copies, Aadhaar, PAN, address proof |
| Official Website | https://www.udyamimitra.in/ |
| Loan Type | Collateral-free loan |
| Interest Rate | As per the lending institution, subsidized rates available |
What is PM Mudra Yojana?
Launched in April 2015 by the Government of India, the Pradhan Mantri Mudra Yojana (PMMY) is aimed at providing institutional finance to micro and small businesses. Loans under this scheme are collateral-free and primarily targeted at non-corporate, non-farm small/micro enterprises.
The Mudra loans are classified into different categories based on the loan amount:
- Shishu Loan: For businesses in the early stage, loans up to ₹50,000.
- Kishor Loan: For businesses requiring moderate funding, loans ranging between ₹50,000 to ₹5 lakh.
- Tarun Loan: For expanding established businesses, loans from ₹5 lakh up to ₹10 lakh.
- Tarun Plus Loan: Loans up to ₹20 lakh for businesses that have already successfully repaid earlier Mudra loans under the Tarun category.
Detailed Categories of PM Mudra Loans
1. Shishu Loan (Up to ₹50,000)
Ideal for those starting a small business or setting up their venture. Shishu loans cover basic needs such as purchase of equipment, inventory, or working capital requirements.
2. Kishor Loan (₹50,001 to ₹5 Lakh)
For businesses that are already operational and need funding to expand, upgrade equipment, or enhance operational capacity.
3. Tarun Loan (₹5 Lakh to ₹10 Lakh)
Designed for more established businesses that are looking to expand significantly or move to a larger scale of operations.
4. Tarun Plus Loan (₹10 Lakh to ₹20 Lakh)
A new addition allowing businesses that have already availed and successfully repaid the Tarun loan to secure higher funding up to ₹20 lakh for expansion and growth.
Who Can Apply for a PM Mudra Loan?
Anyone planning to start or expand a non-farm small/micro enterprise can apply. This includes:
- Small manufacturing units
- Service sector businesses
- Shop owners
- Artisans
- Traders
- Small vendors and hawkers
- Food processing units
The applicant must have a viable business plan and show the capacity for loan repayment.
How to Apply for a PM Mudra Loan?
The application process for PM Mudra Yojana is straightforward:
Step 1: Visit the Official Portal
- Go to https://www.udyamimitra.in/
- Click on the “Apply for Loan” section.
Step 2: Prepare the Required Documents
You will need the following documents:
- Business Plan and Project Report
- Income Tax Returns (if applicable)
- Self-Declaration of Income (if ITR not available)
- Aadhaar Card
- PAN Card
- Proof of Business Address
- Proof of Residential Address
Step 3: Choose the Loan Category
Select the appropriate category — Shishu, Kishor, Tarun, or Tarun Plus — based on your funding needs.
Step 4: Submit the Application
Fill in the required details and upload necessary documents. After submission, the bank or financial institution will assess your application and contact you.
Interest Rates and Repayment Terms
- Interest rates are not fixed under PMMY and are determined by the lending institution (banks/NBFCs) according to RBI guidelines.
- Loans are generally offered at subsidized interest rates.
- Repayment terms are flexible, ranging from 3 years to 5 years, depending on the amount and type of loan.
Benefits of PM Mudra Yojana
- No collateral/security is needed
- Simplified documentation
- Encourages entrepreneurship among youth, women, and marginalized sections
- Boosts small business sector, helping India’s economy grow
Official Website Link
To apply or know more about the PM Mudra Yojana, visit the official website:
https://www.udyamimitra.in/
FAQs on PM Mudra Yojana
Q1. What is the maximum loan amount I can get under PM Mudra Yojana?
Ans. You can avail a maximum loan of up to ₹20 lakh under the Tarun Plus category.
Q2. Is collateral required to get a Mudra loan?
Ans. No, Mudra loans are completely collateral-free.
Q3. What is the minimum amount available under PM Mudra Yojana?
Ans. The minimum loan amount starts from ₹50,000 under the Shishu category.
Q4. Do I need a business plan to apply?
Ans. Yes, a detailed business plan or project report is mandatory.
Q5. Can I apply for a Mudra loan online?
Ans. Yes, you can apply through the official portal https://www.udyamimitra.in/.
Q6. How long does it take for the loan to be approved?
Ans. Approval timelines vary from bank to bank, but typically range from a few days to a few weeks, depending on document verification.
Conclusion
The PM Mudra Yojana is a revolutionary step by the Government of India to empower small businesses, create jobs, and foster a culture of entrepreneurship. With loan amounts ranging from ₹50,000 to ₹20 lakh, easy eligibility criteria, and minimal documentation, the scheme offers a golden opportunity for all those looking to realize their business dreams. If you are an aspiring entrepreneur or a small business owner in need of funding, now is the right time to apply.
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