Mudra loan

MUDRA Loan is come under the Pradhan Mantri Mudra Yojana (PMMY). MUDRA means Micro-Units Development and Refinance Agency. Under this scheme, borrowers can issue business loans ranging from Rs.50,000 to Rs.10 lakh according to the Sishu, Kishor, and Tarun categories.

These schemes are introduced to help in fulfilling the requirements of different business start-ups and sectors as well as the requirements of entrepreneur/business segments.

How to apply for a MUDRA loan?

  1. Keep the required documents ready. The important documents you will require is ID proof, address proof, and business proof.
  2. Find and select a lender who is enrolled under the MUDRA scheme and then fill the application form.
  3. Submit all the required documents.


MUDRA loans can be avail for many reasons that help in establishing the business and generating income. Below are the main purposes for which MUDRA loans can be taken:

1) Provide business loan for shopkeepers, traders, vendors and other activities in the service sector.

2) Give the equipment finance for small enterprise units.

3) Working capital loan via MUDRA cards.

4) Offers transport vehicle loans.

MUDRA loan eligibility

Indian citizens who have their business plans or trading or hiving manufacturing activities and required amounts of up to Rs.10 lakh can apply for MUDRA loans. MUDRA loans can be taken from public sector banks, private sector banks, regional rural banks (RRBs), small finance banks (SFBs), and also from microfinance institutions (MFIs).

Eligibility criteria for MUDRA Loan:

  • At least 18 years old
  • An individual
  • An MSME
  • A trader
  • A manufacturer
  • A business owner
  • A startup businessman
  • A small-scale industrialist
  • A shopkeeper
  • An individual with agricultural engagements

What is the interest rate for the MUDRA loan?

The interest rate for MUDRA Loan depends on the credit profile of the borrowers. There are various banks in the public sector and the private sector, that are offering MUDRA loans. All the providers have certain guidelines on which the final rate of interest at which the loan is provided to a borrower is decided by the provider itself. This is done after understanding the business requirements of the applicant as well.

Features of availing MUDRA Loan

Below are some key features of taking the MUDRA loan:

  1. Banking and financial services can be taken in both rural and urban areas.
  2. Financial backing can be taken by micro-small businesses and start-ups.
  3. Business loans can be taken for small amounts at minimal interest rates.
  4. The borrower’s credit guarantee is managed by the government, so if a borrower is unable to repay the amount, the responsibility for the loss will be bear by the government.
  5. Food vendors, shopkeepers and other small business owners can take the most advantage of this scheme.