PM Mudra Yojana 2026 — Eligibility, Documents, Process & Loan Limits (Shishu, Kishor, Tarun, Tarun Plus)

What is PM Mudra Yojana?

Pradhan Mantri Mudra Yojana (PMMY) is a flagship Government of India scheme launched by Hon'ble Prime Minister Narendra Modi on 8 April 2015 to provide collateral-free institutional credit to non-corporate, non-farm micro and small enterprises across India. The scheme is refinanced by MUDRA (Micro Units Development & Refinance Agency Ltd.), a subsidiary of SIDBI, and delivered on the ground through commercial banks, Regional Rural Banks (RRBs), Small Finance Banks, Microfinance Institutions (MFIs), and Non-Banking Financial Companies (NBFCs).

The core objective of PM Mudra Yojana is financial inclusion — bringing India's vast unbanked and underbanked population of shopkeepers, artisans, food vendors, small manufacturers, and service providers into the formal credit system, freeing them from dependence on informal moneylenders. Loans under PMMY require no collateral and no third-party guarantee, and are currently available up to ₹20 lakh across four categories — Shishu, Kishor, Tarun, and the newly introduced Tarun Plus.

At Naresh Kalra Advisors Services, we help entrepreneurs across Chandigarh, Mohali, Panchkula, Ludhiana, and Pan-India understand eligibility, prepare documentation, and navigate the application process smoothly — so your Mudra loan application moves through the system without avoidable delays or rejections.

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Objectives of PM Mudra Yojana

PM Mudra Yojana was designed with a clear, financial-inclusion-driven mandate. The scheme's key objectives include:

Providing formal, collateral-free credit access to micro and small enterprises that were previously excluded from institutional banking
Promoting entrepreneurship and self-employment, particularly among first-time entrepreneurs, women, and marginalised communities
Reducing dependence on informal moneylenders who often charge exploitative interest rates
Strengthening the Non-Corporate Small Business Segment (NCSBS) — proprietorships, partnerships, and small service/manufacturing units
Generating employment at the grassroots level by enabling small businesses to expand and hire
Supporting the Government of India's broader Viksit Bharat and Atmanirbhar Bharat vision for inclusive economic growth

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Mudra Loan Categories & Limits

PM Mudra Yojana is structured into four categories, each aligned to a different stage of business growth and funding need. Loan categorisation determines documentation depth, processing fees, and typical interest rate range.

Shishu

Up to ₹50,000

For first-time entrepreneurs and micro businesses just starting out.

Processing fee: Nil

Kishor

₹50,000 – ₹5 Lakh

For businesses that have moved past the start-up phase and need funds for expansion or stabilisation.

Processing fee: ~0.5%

Tarun

₹5 Lakh – ₹10 Lakh

For established, well-running micro enterprises ready to scale operations further.

Processing fee: ~0.5%

Tarun Plus

₹10 Lakh – ₹20 Lakh

For entrepreneurs who have previously availed and successfully repaid a loan under the Tarun category.

Processing fee: As per lender policy

NOTE

The Tarun Plus category, taking the overall PMMY ceiling to ₹20 lakh, is available only to repeat borrowers with a satisfactory repayment track record under a prior Tarun loan — it is not available to new, first-time applicants.

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Eligibility Criteria

To qualify for a PM Mudra Yojana loan, applicants must satisfy the following criteria set by MUDRA and the Government of India:

Citizenship

The applicant must be an Indian citizen.

Age Limit

Minimum 18 years and maximum 65 years at the time of application.

Business Nature

Non-farm, income-generating activity in manufacturing, trading, or services.

Allied Agriculture

Poultry, dairy, beekeeping, fishery, and food processing are eligible; crop loans and land improvement are not.

Credit History

The applicant must not be a defaulter with any bank or financial institution.

Credit Requirement

Total credit need for the business must fall within the ₹20 lakh PMMY ceiling.

Unlike many other business loan products, a good CIBIL score is not mandatory for Shishu loans up to ₹50,000. However, for Kishor and Tarun loans, banks typically do review credit history to assess repayment capacity, so maintaining a clean credit record materially improves approval chances and the eligible loan amount.

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Who Can Apply & Eligible Business Activities

Eligible Applicant Types

Individual entrepreneurs and self-employed professionals
Proprietorship firms
Partnership firms
Private limited companies (small enterprises)
Shopkeepers, fruit/vegetable vendors, and street vendors
Truck operators, food-service units, and repair shops
Machine operators, small industries, and artisans
Food processors and small manufacturing units

Eligible Business Activities

Manufacturing

Small-scale production units, machine operators, and processing enterprises.

Trading

Shopkeepers, retailers, wholesalers, and traders of goods.

Services

Repair shops, salons, transport operators, and other income-generating services.

Allied Agriculture

Poultry, dairy, beekeeping, pisciculture, and food & agro-processing activities.

Transport Vehicles

Purchase of auto-rickshaws, e-rickshaws, small goods vehicles, taxis, and 3-wheelers for commercial use.

Equipment Finance

Purchase of machinery and equipment for setting up or upgrading micro enterprises.

NOT COVERED

Direct crop loans and land improvement activities such as irrigation, wells, and canal construction are specifically excluded from PMMY coverage, even though allied agricultural activities remain eligible.

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Documents Required

Keeping the following documents ready in advance significantly speeds up processing — incomplete documentation remains one of the most common reasons for delayed or rejected applications.

Identity Proof

Aadhaar Card, PAN Card, Voter ID Card, Passport, or Driving License.

Address Proof

Aadhaar Card, Passport, recent utility bills (electricity/water, not older than 2 months), or bank statement.

Photographs

Recent passport-size photographs, as specified on the application form.

Proof of Business Existence

Udyam Registration, shop/trade licence, GST registration (if applicable), or other proof of business continuity.

Income Proof

Latest Income Tax Returns (typically the last two years for existing businesses) and financial statements.

Bank Statements

Last 6 to 12 months' bank statement of the business or applicant's operating account.

Quotation / Machinery Estimate

Supplier quotation for machinery or equipment, where the loan is intended for asset purchase.

Category Certificate (If Applicable)

SC/ST/OBC/Minority certificate where the applicant wishes to claim category-specific scheme benefits.

For higher-value Kishor and Tarun applications, lenders may additionally request a business plan or project report, ownership proof of business premises or residence, and trade references. Shishu loan applicants typically face a lighter documentation requirement given the smaller ticket size.

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Step-by-Step Application Process

Online Application — via JanSamarth / UdyamiMitra Portal

Visit the Official Portal: Go to jansamarth.in (the National Portal for Government Sponsored Schemes) or udyamimitra.in.
Check Eligibility: Select "Business Activity Loan," answer a few questions about your business, and view your eligible loan amount and category.
Register/Login: Enter your mobile number and verify via OTP to create your account.
Fill the Application Form: Provide personal, business, and loan-requirement details, and select your loan category — Shishu, Kishor, Tarun, or Tarun Plus.
Upload Documents: Scan and upload identity, address, income, and business-continuity documents as listed on the portal.
Select Lender: Compare offers from multiple banks/NBFCs and choose your preferred lending institution.
Submit & Track: Submit the application to receive a digital in-principle approval; final disbursement typically requires a branch visit for verification.

Offline Application — via Bank Branch

Visit a Nearby Branch: Approach any participating bank, RRB, or MFI branch offering Mudra loans.
Collect the Application Form: Request the Shishu form, or the common Kishor/Tarun application form, or download it from mudra.org.in.
Fill in Accurate Details: Complete personal, business, and financial details in the form.
Attach Required Documents: Submit all supporting documents listed in the Documents Required section above.
Submit for Verification: The lender reviews the application and verifies the submitted documents.
Sanction & Disbursement: Upon approval, the loan amount is disbursed directly into the applicant's business/operating bank account.

IMPORTANT

MUDRA does not lend directly to entrepreneurs — it is a refinancing institution. All Mudra loans are sanctioned and disbursed by the participating bank, NBFC, or MFI. There are no authorised agents or middlemen for PMMY; applicants should apply only through official portals or directly at bank branches.

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Interest Rates & Repayment Terms

There is no single fixed interest rate under PM Mudra Yojana — rates are set by individual lenders based on their MCLR or the RBI repo rate, along with the applicant's credit profile. Indicative ranges are as follows:

Loan Category	Indicative Interest Rate (p.a.)	Processing Fee	Typical Repayment Tenure
Shishu (up to ₹50,000)	10% – 12%	Nil	Up to 5 years, with moratorium option
Kishor (₹50,000 – ₹5 lakh)	11% – 15%	~0.5%	Up to 5–7 years
Tarun (₹5 lakh – ₹10 lakh)	12% – 16%	~0.5%	Up to 7 years
Tarun Plus (₹10 lakh – ₹20 lakh)	As per lender policy	As per lender policy	As per lender policy

Repayment tenure generally ranges from 3 months to 7 years depending on the lender and loan category, with some lenders offering a moratorium period of up to 12 months before EMI repayment begins. There are typically no foreclosure charges on Mudra loans, and many banks offer a small interest-rate concession to women entrepreneurs.

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MUDRA Card — Flexible Working Capital Access

A key feature of PMMY is the MUDRA Card — a RuPay-enabled debit card issued to eligible borrowers and linked to their working capital loan account. Rather than drawing the entire sanctioned amount at once, borrowers can withdraw funds as and when needed for day-to-day business expenses, similar to an overdraft facility.

Available across Shishu, Kishor, and Tarun categories, subject to lender policy
Interest is charged only on the amount actually utilised, not the full sanctioned limit
Usable at ATMs and POS terminals nationwide via the RuPay network
Reduces the need for repeated loan applications for recurring working capital needs

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Benefits of PM Mudra Yojana

Collateral-Free Credit

No security or third-party guarantee required, removing the biggest barrier faced by micro entrepreneurs seeking formal credit.

Wide Lender Network

Available through public sector banks, private banks, RRBs, Small Finance Banks, MFIs, and NBFCs across India.

Nil/Low Processing Fees

No processing fee for Shishu loans, and nominal fees (~0.5%) for Kishor and Tarun categories.

Flexible Repayment

Tenure options ranging from a few months up to 7 years, with moratorium periods available on many products.

MUDRA Card Facility

RuPay-enabled working capital access, drawing funds only as needed rather than as a lump sum.

Support for First-Time Entrepreneurs

Designed specifically to bring first-generation entrepreneurs into the formal credit system without a prior banking track record.

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Common Mistakes & Reasons for Rejection

Incomplete or mismatched documentation: Details on application forms must exactly match Aadhaar and PAN records — mismatched names or addresses are a leading cause of delay
Weak or missing business plan: For loans above ₹5 lakh, an unclear or unrealistic business plan is a frequent rejection reason
Poor banking conduct: Frequent cheque bounces or irregular account operation in the applicant's current account can lead to immediate disqualification
Existing loan default: Any unresolved default with another bank or financial institution disqualifies the applicant
Using an unofficial "agent": MUDRA does not authorise agents or middlemen — applications should only be made via jansamarth.in, udyamimitra.in, mudra.org.in, or directly at a bank branch
Applying for personal expenses: Mudra loans are strictly for business/income-generating purposes and cannot be used for personal consumption

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Mudra Loan vs Regular Business Loan

Parameter	PM Mudra Loan (PMMY)	Regular Business Loan
Collateral	Not required	Often required for higher amounts
Maximum Amount	Up to ₹20 lakh	Can extend to ₹1 crore or more
Processing Fee	Nil (Shishu) / ~0.5% (Kishor, Tarun)	Typically 1% – 2.5%
Target Borrower	Micro & small non-corporate businesses	Businesses of all sizes, including larger enterprises
Government Backing	Refinanced by MUDRA (SIDBI subsidiary)	Purely commercial lending
Credit Score Requirement	Not mandatory for Shishu; reviewed for Kishor/Tarun	Generally mandatory across ticket sizes

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How Naresh Kalra Advisors Services Can Help

Navigating PM Mudra Yojana paperwork, category selection, and lender coordination can be confusing for first-time applicants. Our advisory team supports entrepreneurs across Chandigarh, Mohali, Panchkula, Ludhiana, and Pan-India through the entire Mudra loan journey:

Eligibility & Category Assessment

Determining whether Shishu, Kishor, Tarun, or Tarun Plus best fits your business stage and funding need.

Documentation Support

Preparing and verifying identity, address, income, and business-continuity documents before submission.

Business Plan & Project Report

Drafting a lender-ready business plan or project report for Kishor and Tarun category applications above ₹5 lakh.

Application Filing Assistance

Guided filing through the JanSamarth or UdyamiMitra portal, or coordinated offline submission at your preferred bank branch.

Udyam & MSME Registration

Assistance with Udyam Registration and related MSME compliance that strengthens your loan application.

Post-Sanction Compliance

Guidance on maintaining compliance and documentation after disbursement, including for future top-up or Tarun Plus eligibility.

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Frequently Asked Questions (FAQs)

What is PM Mudra Yojana?

PMMY is a Government of India scheme launched on 8 April 2015 that provides collateral-free loans up to ₹20 lakh to non-corporate, non-farm micro and small enterprises, refinanced by MUDRA and delivered through banks, NBFCs, and MFIs.

What are the categories of Mudra loans?

Shishu (up to ₹50,000), Kishor (₹50,000 to ₹5 lakh), Tarun (₹5 lakh to ₹10 lakh), and Tarun Plus (above ₹10 lakh up to ₹20 lakh) for repeat borrowers who successfully repaid a Tarun loan.

Who is eligible for a PM Mudra Yojana loan?

Indian citizens aged 18–65 running or planning a non-farm income-generating business in manufacturing, trading, or services — including allied agricultural activities — provided they are not a loan defaulter.

What documents are required for a Mudra loan?

Identity proof, address proof, photographs, proof of business existence, income proof/ITR, 6–12 months' bank statements, and category certificates (SC/ST/OBC/Minority) where applicable.

Is collateral required for a Mudra loan?

No — Mudra loans are collateral-free with no third-party guarantee required, though final sanction depends on the lender's assessment of the applicant's business profile and repayment capacity.

How can I apply for a PM Mudra Yojana loan online?

Apply via jansamarth.in or udyamimitra.in, or offline by visiting a participating bank branch with the relevant Shishu/Kishor/Tarun form and required documents.

What is PM Mudra Yojana?

8 April 2015

₹20 Lakh

Nil

4

57.79 Crore+

₹40.07 Lakh Crore+

67%

jansamarth.in

On This Page

Objectives of PM Mudra Yojana

Mudra Loan Categories & Limits

Shishu

Kishor

Tarun

Tarun Plus

NOTE

Eligibility Criteria

Citizenship

Age Limit

Business Nature

Allied Agriculture

Credit History

Credit Requirement

Who Can Apply & Eligible Business Activities

Eligible Applicant Types

Eligible Business Activities

Manufacturing

Trading

Services

Allied Agriculture

Transport Vehicles

Equipment Finance

NOT COVERED

Documents Required

Identity Proof

Address Proof

Photographs

Proof of Business Existence

Income Proof

Bank Statements

Quotation / Machinery Estimate

Category Certificate (If Applicable)

Step-by-Step Application Process

Online Application — via JanSamarth / UdyamiMitra Portal

Offline Application — via Bank Branch

IMPORTANT

Interest Rates & Repayment Terms

MUDRA Card — Flexible Working Capital Access

Benefits of PM Mudra Yojana

Collateral-Free Credit

Wide Lender Network

Nil/Low Processing Fees

Flexible Repayment

MUDRA Card Facility

Support for First-Time Entrepreneurs

Common Mistakes & Reasons for Rejection

Mudra Loan vs Regular Business Loan

How Naresh Kalra Advisors Services Can Help

Eligibility & Category Assessment

Documentation Support

Business Plan & Project Report

Application Filing Assistance

Udyam & MSME Registration

Post-Sanction Compliance

PM Mudra Yojana Impact So Far

Frequently Asked Questions (FAQs)

India Offices

International Associate Offices

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