Pradhan Mantri Mudra Yojana | PMMY

Pradhan Mantri Mudra Yojana was launched by Prime Minister Shri Narendrabhai Modi on April 8, 2015 with the objective of promoting youth and working small scale industries in India. Mudra (Micro Units Development & Refinance Agency Ltd.) Bank was established under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.

Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana

Post Name
Pradhan Mantri Mudra Yojana (PMMY)
Post Type
Goverment Of India (Ministry of Finance)
Youth ans working small scale industries
Helpline Number
1800 233 8944 (Gujarat)
Official Website


Usually when a person applies to a bank to pursue his business, a guarantee has to be given for this, which often leads to a repayment of the loan. With this in mind, the Prime Minister announced the Pradhan Mantri Mudra Yojana in which loans will be available without guarantee

Objectives of Mudra Bank

  • Giving stability to small investors, entrepreneurs through micro loans.
  • Assist microfinance institutes and small businesses, retailers, self-help groups-individuals lending agencies.
  • Register all micro finance institutes and introduce the practice of performance rating (performance appraisal) to improve the efficiency of such institutions and create opportunities for healthy competition among them, which directly benefits the borrowers.
  • Provide proper methodological guidance to the borrowers, units, institutions so that they can avoid business failures and stop defaulting.
  • Preparation of standardized regulatory letters, which will prove to be a very important step for small businesses in the future.

Eligible to get PM Mudra Loan

This loan is available to any Indian citizen who is engaged in non-agricultural sector such as trade, service sector, and who needs less than Rs.10 lack can approach either a Bank, MFI, or NBFC for availing of Micro Units Development & Refinance Agency Ltd. (MUDRA) loans under Pradhan Mantri Mudra Yojana (PMMY).

Type of Mundra Loan

The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to. It would be ensured that at least 60% of the credit flows to Shishu Category Units and the balance to Kishor and Tarun Categories.
There is no subsidy for the loan given under PMMY. However, if the loan proposal is linked some Government scheme, wherein the Government is providing capital subsidy, it will be eligible under PMMY also.
There are three types of Mudra Loans for different businesses.

  • Shishu : Under this scheme loan up to Rs. 50,000 is given.
  • Kishor :Under this scheme loan Rs. 50,000 to Rs. 5,00,000 are given.
  • Tarun : Under this scheme loan Rs. 5,00,000 to Rs. 10,000,000 are given

Interest rate

Interest rates are to be charged as per the policy decision of the bank. However, the interest rate charged to ultimate borrowers shall be reasonable. Scheduled Commercial Banks, RRBs and Cooperative Banks wishing to avail of refinance from MUDRA will have to peg their interest rates, as advised by MUDRA Ltd., from time to time.

Which sections are included?

To maximize coverage of beneficiaries and tailor products to meet requirements of specific business activities, sector / activity focused schemes would be rolled out. To begin with, based on higher concentration of businesses in certain activities / sectors, schemes are proposed for

Land Transport Sector / Activity :

Which will inter alia support units for purchase of transport vehicles for goods and personal transport such as auto rickshaw, small goods transport vehicle, 3 wheelers, e-rickshaw, passenger cars, taxis, etc.

Community, Social & Personal Service Activities

Such as saloons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shop, DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc.

Food Products Sector

Support would be available for undertaking activities such as papad making, achaar making, jam / jelly making, agricultural produce preservation at rural level, sweet shops, small service food stalls and day to day catering / canteen services, cold chain vehicles, cold storages, ice making units, ice cream making units, biscuit, bread and bun making, etc.

Textile Products Sector / Activity

To provide support for undertaking activities such as handloom, powerloom, chikan work, zari and zardozi work, traditional embroidery and hand work, traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non garment products such as bags, vehicle accessories, furnishing accessories, etc.

How to apply PM Mudra Loan

Gather information and choose the right bank

  • There is no set procedure for applying for a loan as per Mudra Yojana. For this, the applicant has to collect complete information about the loan process as well as interest rate in the nearby bank. In addition to applying for a loan, one has to submit an application form as well as certain documents.

Which documents are required for this loan?

  • Different documents such as Balance Sheet, Income Tax Returns and information about your current business. From all these papers the bank wants to guess whether you are able to repay the loan or not! They will also try to find out how much risk there is in your business so that they know if their money will be safe or not.
  • The bank will also try to get complete information about your Business Plan, Project Report, Future Income Estimates so that people can know how to use their loan and how to take profit from it. It will also try to find out what the business will do next.

Document Required for PM Mudra Load

  • Proof of Identity – Self certified copy of Voter ID Card / Driving License / PAN Card / Aadhar Card / Passport.
  • Proof of Residence – Recent Telephone Bill, Electricity Bill, Property Tax Receipt (not older than 2 months), Voter ID Card, Aadhaar Card and Passport of Owner / Partners.
  • Proof of SC / ST / OBC / Minority.
  • Proof of identity / address of the business enterprise – relevant license / registration certificates / documents of ownership of the business, identity and other documents related to the address.
  • The applicant should not be a defaulter in any bank / financial institution.
  • Current banker, if any, statement of accounts (last six months)
  • Balance sheet of the last two years of the unit with income tax / sales tax returns etc. (Over Rs. 2 lakhs and applicable for all cases)
  • Estimated balance sheets for one year for loan term in case of working capital limit and term loan (Rs. 2 lakhs and above all applicable)
  • Sales received in the current financial year from the date of application.
  • Project report detailing technical and economic environment (for proposed plan).
  • Partnership deed (in case of partnership firm) etc.
  • Partners, including asset and liability statements (in the absence of a party guarantee), borrowers may be asked for net-worth information.
  • Owner / Partner Photos (two copies)

Important Link :

Official Site

Based on the economic life of the assets created and also the cash flow generated. However, MUDRA’s refinance assistance will be for a maximum tenor of 36 months which will also be aligned to terms of allotment of MUDRA funds by RBI from time to time.

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