Pradhan Mantri MUDRA Loan Yojana

Mudra Loan scheme was launched by the PM Narendra Modi in April 2015, the scheme opened doors to small businesses, the government was supporting with the financial strength, this scheme aim is to serve the beneath people who are lack of business opportunities but later on a wide range of economic activities like retail, manufacturing, trading, etc.

                   The small and independent entrepreneurs in India can now enjoy their business by satisfying invest worth into it to get successor, once upon a time, all these entrepreneurs have been struggling to get access to the banking system, loans, insurance, and other financial products that are often considered the backbone of any business.

           ‘Micro Units Development Refinance Agency( MUDRA bank)’, since then many banks and financial institutions have been offering business loans to sole properties of small and medium enterprises under this scheme.

       As per the graph, the MUDRA is not a full-fledged banker but in the future, this scheme will be converted into full-fledged banking for loans.


  • The applicant of loan must be Indian
  • The loan can be applicable only to the micro or small businesses
  • The correct proof for Identity, residence along with two set of partners/ Directors Photos
  • The loan amount must be within the Rs 10,00,000

Interest rates of MUDHRA

      The interest rate of MUDRA loan varies from 11-18 % from bank to bank

  • If the loan under MUDRA SHISHU up to 50,000 then the nominal rates around  10-12%  have been charged
  • If the loan under MUDRA KISHOR  up to 5,00,000 which comes under unsecured loans so interest rates would be 14-17%
  • If the loan under MUDRA TARUN with in the range of 10 lakh it varies with the interest of 16% and varies from bank to bank.

Documents Required

  • The proofs of Identity, Residency and business address
  • Balance sheets of income tax/ sales tax for the last three years
  • A written proposal of the company is needed
  • A rental agreement if the business place on rent
  • Registration forms  SSI/ MSME if applicable

Application process for MUDRA loan

  • Initially, the applicant of this scheme should approach any one of these banks that are listed for MUDRA schemes
  • Provide  the bank with complete business details of the applicant into one of three either SHISHU, KISHOR or TARUN
  • Fill up the MUDRA form for the loan, along with the current account opening in the bank
  • The loan under this scheme is absolutely free, hence is very easy to obtain with a good credit history of the business.  

The sample application form for the MUDRA scheme

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