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Someone wants to start a new business or to develop his current business, he generally does apply for a bank loan, but the processes of a loan from a Bank are very difficult and also give guarantee for it. Which is this why most of the individuals are unwilling to take a Loan from a Bank.

Keeping this in mind, the Government of India has launched the scheme “Prime Minister Mudra Yojna (PMMY) Mudra Loan” in April 2015.

The main goal of the Mudra (Micro Units Development Refinance Agency) Scheme is to promote small-scale industries in the country and fulfill their financial needs

Benefits of Mudra Scheme

On the Mudra scheme, the loan gets normally without guarantee

No processing fees for the Mudra scheme loan.

Repayment Period of Mudra loan is maximum up to 5 years.

Mudra card will provide Working capital as a loan

Who is Eligible for  Mudra Scheme?

Any Indian citizen or firm who wants to start his business in any field (except agriculture) or want to develop his current business and financial needs up to Rs 10 lakh, is Eligible to Apply for a loan under the Prime Minister Mudra Loan Scheme.

Types of Loan Under Mudra Scheme

Keeping in mind the needs of different businesses, Mudra Loan is divided into three types.

  1. Shishu: Applicable loan up to ₹50,000
  2. Kishore: Applicable loan above ₹50,000 and up to ₹5,00,000
  3. Tarun: Applicable loan above ₹5,00,000 and up to ₹10,00,000

Interest Rates of Mudra  Loan

Under the Mudra Loan, there are no fixed interest rates. Interest rates can vary between different banks and depend on the risk of the applicant’s business.

Usually, Mudra Loan Interest rates of 12% are around every year. In the Mudra Loan Scheme, there is no subsidy is given on behalf of the government.

The process of Mudra Loan

Step 1: gather information and choose the right bank.

There is no fixed procedure for applying for Mudra loan scheme. First, the applicant should contact the banks around him and gather all the information about the loan process and interest rate. To get the loan, you will submit the particular documents along with the complete application form.

Step 2: Preparing documents and submitting applications

Presently overall major public and private sector banks are giving loans under the Mudra scheme.

The bank will generally want such information which they can provide a loan based on your financial needs.

Documents of various kinds for Mudra loan:

By trying to find out the various documents such as Balance Sheet, Income Tax Returns and information about your current business for the past two years, whether you have the ability to repay the loan with interest or not. Banks try to know about the risks in your business that they can ensure that the money given by them will be safe.

You should convince the bank through your, Project Report, about the nature of the business that loans will be used, and how much and how the benefits will increase through Future Income Estimates and future Business Plan.

Checklist for Mudra Loan (Documents Required)

Generally, for the Mudra loan, you have to submit the following documents with the application form.

The number of documents may be lower depending on the amount of loan, Business Nature, Bank Rules, etc.

If you are applying up to 50000 loans, then you may not need the Balance Sheet and Income Tax Return.

  1. Proof of identity – A self-attested copy of Voter’s ID card / Driving License / PAN Card / Aadhar Card/Passport.
  2. Address proof – Recent Telephone bill, electricity bill, tax receipt of property (not older than 2 months), Voter’s ID, Adhaar Card & Passport of Proprietor/Partners.
  3. Proof of SC/ST/OBC/Minority.
  4. Identity/Address Proof of the Business venture – Copies of related licenses/registration certificates/other documents pertaining to the possession identity, and address of the business unit.
  5. Applicant should not be a defaulter in any Bank/Financial institution.
  6. Accounts statement (for the last six months) from the existing banker, if any.
  7. For an existing business, last two years balance sheets along with income tax/sales tax return etc.
  8. One year Projected balance sheets in case of working capital limits and for the period of the loan in term loan (Applicable for all cases from Rs.2 Lacs and above).
  9. Statement of Sales achieved during the current financial year up to the date of submission of application.
  10. Project report (for the proposed project)

containing details of technical & economic viability.

  1. Partnership Deed (in case of partnership firm)etc
  2. Asset & Liability statement (In absence of the third-party guarantee,) from the borrower including Partners may be sought to know the net worth.
  3. Photos (two copies) of Proprietor/ Partners
Download Mudra Loan Application Form

For Mudra Loan, you can get the application form the concerned bank or you can download it from the bank website You can also download Mudra Loan Application Form from this link –

Download Mudra Loan Application Form

Step 3.
Loan Processing

After submitting the application form with the Proper Documents, the bank will scrutinize your documents. If the applicant’s documents and the business project are not correct as per norms, then the bank can also reject the applicant’s application. If there is a small mistake in the documents and application, then the bank only approves loan after the applicant rectify the mistake.

The Loan Processing Once completed, you will be given a check of the disbursement amount deposited in the applicant’s bank account. Banks ensure that the amount of loan is spent only for your business or for the purpose, for which the loan has been given. For this, they take several steps like if the applicant has to buy any large machinery or equipment in his project, then payment should be done through the check.

Mudra Card

mudra card
For all applicants who get  Murda loan, a Mudra card (Rupay Debit Card) will be issued,  similar to a debit card in a manner. The Mudra Card helps to fulfill the requirements of the working capital that the businessman meet daily business expenses through the card and reduce the interest cost.

Mudra Yojana Website –
Mail –

Helpline Numbers For PMMY – Call – 1800 180 1111 call – 1800 11 0001.

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