If you’re an entrepreneur, small business owner or planning to start your own business venture in India, the Mudra Loan 2025 under the Pradhan Mantri Mudra Yojana (PMMY) can be a game changer.
This government scheme provides easy access to the collateral-free business loans for Micro and small enterprises, aiming to boost entrepreneurship, employment and financial inclusion.
In this article we will cover every aspect of the Mudra Yojna like: What is Mudra Loan?, types of mudra loan, eligibility criteria, interest rates in 2025, Documents required, how to apply online and offline, benefits and important tips.
What is a Mudra loan?
Mudra loan is a government initiative launched under the Pradhan Mantri Mudra Yojana (PMMY) in 2015 to support non-corporate, non-farm small/micro enterprises. To provide them financial help to grow their business.
Key highlights:
- Loan amount: Up to ₹10 lakh
- Collateral: Not required
- Purpose: Working capital, equipment purchase, business expansion
This loan scheme is available through the banks, NBFCs, microfinance institutions and cooperative banks
Types of Mudra loan:
Mudra loan are categorized into three types based on the stage of the business or the level of the business is presently at. The 3 types of Mudra loans are:
| Loan Type | Loan Amount | Suitable For |
| Shishu | Up to ₹50,000 | New/startup businesses |
| Kishor | ₹50,001 – ₹5 lakh | Growing businesses needing equipment/funds |
| Tarun | ₹5 lakh – ₹10 lakh | Established businesses with expansion needs |
These categories of the mudra loan helps tailor financing to the specific needs of the business.
Mudra Loan Eligibility Criteria:
To qualify for a Mudra Loan in India, You must meet the following criteria:
- Indian citizen aged 18-65 years.
- Must own a plan to start a non-farm income generating activity.
- Business such as:
1. Small manufacturing units
2. Service sector enterprises
3. Shopkeepers, traders, vendors.
- Artisans, food processing units, and transport services
- Must not be a defaulter from any bank or financial institutions.
Tip: Businesses registered under the MSME or Udyam portal are more likely to get quicker approvals.
Documents Required for the Mudra Loan:
This is the list of the documents required for the Mudra loan. Ensure having these documents ready while applying for the Mudra Loans:
For Individual:
- Aadhar card, Pan card
- Passport -Sized photographs.
- Address proof (Voter ID, Utility bills etc.)
- Business plan and Project report.
For Businesses:
- Business registration certificate.
- GST registration (if applicable)
- Bank statement (last 6 months)
- Balance sheet/profit loss account ( for kishor /Tarun)
Pro Tip: Submit a clear and concise business plan to increase your chance of loan approval.
Mudra Loan 2025 Interest Rates:
Mudra loan interest rates are generally not fixed and vary depending on the following:
- Loan category (Shishu/kishor/Tarun)
- Lender of your loan (Bank, NBFC, MFI)
- Credit profile of the applicant.
Approximate Interest Rate Range:
- Shishu: 8%-12%
- Kishor: 10%-14%
- Tarun: 11%-16%
Major banks like SBI, HDFC, and The bank of Baroda Offer the competitive rates under the PMMY.
How to apply for the Mudra Loan (Online and Offline):
Online process to apply for the Mudra Loan:
- Visit the official website of the Mudra loan participating bank (e.g, SBI, Canara Bank)
- Go to the PMMY/ Mudra loan section
- Fill the personal, business and loan details.
- Upload scanned documents
- Submit the application and wait for the processing of the loan.
- You can also visit the https://www.udyamimitra.in/ to apply digitally.
Offline process:
- Visit your nearest bank branch associated with the PMMY.
- Fill out the Muddra Loan Application Form.
- Submit the form with all the required documents
- Bank details will process and verify your application
Tip: Follow up with your bank regularly to speed up the approval process
Benefits of Mudra Loan:
- No collateral required
- Competitive interest rates.
- Wide availability of the loans through the banks, MFIs, NBFCs
- Flexible repayments tenure.
- Boost credit score or repair with the timely repayments.
- Encourages women entrepreneurs special schemes available for the womens
Some states also offer interest subsidy for the women, SC/ST and minority borrowers under PMMY.
Things to Remember Before Applying for the loan
- Interest rates and processing time may vary from lender to lender and state to state.
- Not all of the applicants are guaranteed for the approval.
- Ensure proper documentation and realistic business plan maintain good repayment behavior for the future credit eligibility.
Frequently asked Questions:
Q1 Can I get a Mudra loan without income proof?
Yes, for Shishu loans, banks may consider your business idea and projected income.
Q2 How long does it take for Mudra loan for approval ?
Typically between 7-15 days depending on the lender and the documentation.
Q3 Is there any subsidy under Mudra loan?
No, there is no direct subsidy under the mudra loan but interest rebate scheme is available for the women and SC/ST applicants in some states.
Q4 Can I apply for the Mudra Loan more than once?
Yes, you can reapply for the Mudra loan for the higher amount after the repayment of your previous loan.