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Most frequent questions and answers

PMMY or Pradhan Mantri Mudra Yojana is a Financial Scheme to the citizen of India by our Honorable Prime Minister Mr. Narendra Modi in 2015 to provide business fund/capital to the Unfunded.
under this scheme any non-corporate, non-farm small or micro enterprise can get a fund up-to Rs. 10 lakh totally collateral-free.

You can apply for a Mudra Loan from any Public or Private Sector banks or Rural or Cooperative Banks as well.
The announcement of the PMMY came alongside the establishment of the Micro Units Development & Refinance Agency Limited (MUDRA Ltd). This agency was created by the government to monitor and oversee the PMMY. MUDRA has given the right of extending this loan to bank branches as well as certain NBFCs and NFIs that finance micro enterprises. So, you can avail of the MUDRA loan from any of these financial institutions.

The MUDRA Yojana offers the following advantages.

  • This loan doesn’t require collateral, so you can borrow without risking any personal or business asset.

  • Government assumes the responsibility to pay the loan in case of default.

  • This loan can be used by you to set up your micro enterprise.

  • This loan can be used by you to fuel, grow and expand your enterprise with funds up to Rs.10 lakh.

  • The MUDRA Yojana scheme available for small businesses in both urban and rural areas.

  • Women profit from lesser interest rates.

  • The loan tenor may be stretched to even 7 years or you may choose to repay within a shorter duration as per your finances.

  • Meet your business’ working capital needs with this loan scheme.

  • This loan also allows you to take advantage of the overdraft facility amount of up to Rs.5000 as part of the Pradhan Mantri Jan-Dhan Yojana.

  • You can also apply for a MUDRA Debit card that gives you instant access to funds in a hassle-free manner.

Here are some of the sectors and activities that can benefit from a MUDRA Yojana loan.

  • Transport: for purchase of vehicles such as rickshaws, 3 wheelers, small goods vehicles, taxis, etc.

  • Community/ Social/ Personal Service: Saloons, gymnasiums, boutiques, dry cleaning, medicine shops, tailoring shops, etc.

  • Food Products: Papad making, jam making, sweet shops, ice cream making, canteen services, etc.

  • Agriculture: Pisciculture, poultry, livestock, agro-processing, bee keeping, rearing, etc.

  • Textile: Handloom, khadi activity traditional embroidery, vehicle accessories, etc.

  • Business: Traders, shopkeepers, service enterprises, non-farm income activities, etc.

Indian citizens part of the non-farm small/ micro enterprises or Non-Corporate Small Business Segment (NCSBS) are eligible for the loan. Also, if you are part of a firm or are an individual operating as one of the following you are eligible for this loan: a small manufacturing unit, service sector unit, trade/ manufacturing-sector unit, shopkeeper, fruit and vegetable vendor, truck operator, food-service unit, repair shop, machine operator, artisan, etc.

To get the loan, you must ensure that you have an adequate credit track record and have not defaulted with any financial institution. Additionally, you need to prove that you have the needed skillset or experience to start or continue the work you have chosen. You will also require a specific set of documents depending on the kind of loan you are applying for. The common documents required are MUDRA application form, photo identity proof, address proof, and bank statement.

There are a few categories under the MUDRA Yojana to keep in mind. They are:
1. Micro Credit Scheme: Here those working in micro enterprises, self-help groups, and joint-liability groups can get up to Rs.1 lakh via micro finance institutions.

2. Women Enterprise Programme: To provide credit at affordable rates to women business owners, this programme, also called the Mahila Uddyami Yojana, offers interest rate concession up to 0.25% on loans.

3. Refinance scheme for Banks: This scheme helps lenders such as commercial banks, regional rural banks, and scheduled co-operative banks refinance loans up to Rs.10 lakh if they have offered credit to micro enterprises based on certain specifications.

4. Mudra Card overdraft: Apart from allowing debit transactions and withdrawals from ATMs, this card provides beneficiaries to make the most of overdraft facilities. It also allows for a cash-credit arrangement for accessing working capital finance.

5. Credit Guarantee Fund: This fund has been created to ensure finances for the purpose of lending to micro units to increase accessibility and ease.

6. Equipment Finance Scheme: With a focus on encouraging entrepreneurs to buy and upgrade their machinery, this scheme offers specific equipment financing.

With the help of the MUDRA Yojana, women entrepreneurs, those belonging to Scheduled Castes, Scheduled Tribes or Other Backward Classes can get the finance required to earn a dignified livelihood via micro enterprises. On May 29, 2018, PM Modi revealed that financial institutions have extended loans up to Rs.6 lakh crore to over 12 crore beneficiaries, 28% of whom are first-time entrepreneurs and 74% are women and 55% belong to SC/ST and OBC category. You too can now avail the required capital to realize your entrepreneurial dream.

Compare Mudra Schemes


up to 50,000.00/-

8.40 – 12.45%.


up to 5,00,000.00/-

8.40 – 12.45%.


up to 10,00,000.00/-

8.40 – 12.45%.