Collateral-free credit for micro and small businesses.
The Pradhan Mantri Mudra Yojana funds non-corporate, non-farm micro and small enterprises — manufacturing, trading, services and allied agricultural activities — through four loan tiers, all without collateral.
The four tiers
Mudra loans fall into four categories by ticket size: Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 Lakh), Tarun (₹5 Lakh to ₹10 Lakh), and Tarun Plus (₹10 Lakh to ₹20 Lakh) — the last introduced for borrowers who have successfully repaid a Tarun loan and need a larger facility to grow.
No collateral is required at any tier; loans up to ₹20 Lakh are backed by the Credit Guarantee Fund for Micro Units (CGFMU), which protects the lending bank rather than the borrower. Mudra does not fix the interest rate — each lender prices the loan on its own policy, typically in the 9–12% range, so comparing offers across two or three banks is worthwhile.
Applications go directly to any empanelled bank, NBFC or microfinance institution, or through the Udyami Mitra portal. Mudra is not a subsidy scheme — it is a collateral and guarantee structure that makes small-ticket lending viable for banks; the full amount borrowed must be repaid with interest.
Who can apply
- Non-corporate, non-farm micro and small enterprises
- Manufacturing, trading, services and agri-allied activities (dairy, poultry, fisheries)
- Existing businesses seeking working capital or equipment, and new units
- Individuals, proprietorships, partnerships and small companies
- No minimum turnover threshold, but a viable business plan is expected for larger tiers
What applicants get wrong
Assuming a fixed government interest rate
Mudra is a guarantee and eligibility framework, not a subsidised rate scheme. Each lender prices independently, generally 9–12% depending on your profile and their policy. Comparing two or three empanelled lenders before committing is worth the effort.
Applying for Tarun Plus without a Tarun repayment history
Tarun Plus is specifically for borrowers who have successfully repaid an earlier Tarun loan. Fresh applicants without that track record should apply for the appropriate lower tier first rather than assuming Tarun Plus is open to all.
Treating Mudra as free money
The absence of collateral does not mean the absence of repayment obligation. A defaulted Mudra loan damages your CIBIL record exactly like any other loan and can bar future access to government-scheme credit.
Documents required
Incomplete files cause most multi-week delays. We assemble the full set upfront, in the order credit teams read it.
KYC & constitution
- PAN & Aadhaar of all promoters / partners / directors
- Certificate of incorporation, MOA-AOA or partnership deed
- Board resolution or partners' authority letter
- GST registration & trade licence
Business proof
- Business registration / Udyam certificate, where applicable
- Business plan or project report for larger tiers
- Bank statements for existing businesses
- Quotation for machinery or equipment, if that is the purpose
How we help with a Mudra application
Tier and lender match
We identify which tier fits your requirement and which empanelled lenders in our panel are currently pricing it sharpest.
File preparation
Business plan, projections and documentation prepared to how the lender's credit desk actually reviews Mudra files.
Submission and follow-up
Filed directly with the lender or via Udyami Mitra, tracked through to sanction and disbursal.
Related facilities & deep-dive guides
Every facility below is placed through the same 80+ lender panel. The long-form guides carry the working numbers, worked examples and lender-by-lender detail.
Frequently Asked Questions
The questions our advisory desk is asked most often about PM Mudra Yojana.
₹20 Lakh, under the Tarun Plus category, available to borrowers who have already repaid a Tarun loan (₹5–10 Lakh) successfully. Fresh borrowers apply for Shishu, Kishore or Tarun based on their requirement.
No, collateral is not required at any tier. Loans are backed by the Credit Guarantee Fund for Micro Units (CGFMU), which protects the lender against default, not the borrower's repayment obligation.
Mudra does not fix a rate — each empanelled lender prices independently, typically 9–12% depending on your profile, the tier and the lender's own policy. Comparing two or three lenders is worthwhile.
Both. Mudra covers new business set-up as well as working capital and equipment needs of existing micro and small enterprises across manufacturing, trading, services and agri-allied activities.
Mudra is a collateral-free lending framework with no subsidy component — you repay the full amount with interest. PMEGP is a credit-linked capital subsidy scheme where a portion of the project cost, typically 15–35%, is a non-repayable government subsidy. The two are not combined for the same project.
Tell us what you need. We'll do the running around.
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