Mudra Loan Yojana 2025 — Eligibility, Types & How to Apply

Pradhan Mantri MUDRA Yojana (PMMY) provides collateral-free loans to non-corporate, non-farm micro and small businesses. If you run a small business — shop, salon, repair workshop, catering, tailoring — Mudra loan can give you working capital and growth finance. Here's how.

Three Categories of Mudra Loan

Category	Loan Limit	For
Shishu	Up to ₹50,000	New/very small businesses just starting
Kishore	₹50,001 – ₹5 lakh	Established businesses needing expansion
Tarun	₹5 lakh – ₹10 lakh	Well-established businesses for major growth

Who is Eligible?

• Indian citizens
• Non-corporate, non-farm small/micro enterprises
• Proprietorships, partnerships, private limited companies
• Self-employed individuals, artisans, traders, manufacturers
• Good credit history (no existing loan default)

Agriculture directly is not covered. But allied activities like poultry, dairy, beekeeping, fisheries are eligible.

Eligible Business Types

• Food processing, catering, tiffin service
• Textile garments, footwear, beauty parlors, salons
• Repair shops — AC, mobile, two-wheeler
• Transport — auto, taxi, small commercial vehicles
• Vendors, hawkers, shopkeepers, street food
• Medical stores, labs, clinics

Mudra loan is not just for first-timers. If you already have a small business and need expansion capital — Kishore or Tarun category can fund equipment, inventory, or working capital.

How to Apply for Mudra Loan

Option 1: Bank/NBFC/MFI

1. Visit any nationalized bank, private bank, RRB, or Mudra-empanelled NBFC/MFI
2. Ask for Mudra loan under the relevant category
3. Fill application form, submit documents
4. Bank sanctions loan — disbursed within 7–30 days after verification

Option 2: Udyami Mitra Portal (Online)

Apply online at udyamimitra.in — enter details, get matched with lender, track application. For Shishu loans, this is especially streamlined.

Documents Required

• KYC: Aadhaar card, PAN card, voter ID / driving licence
• Address proof for business location
• Business registration certificate (if any — MSME, GST)
• Bank statement (6 months)
• Passport-size photographs
• Business plan/quotation for equipment (for larger amounts)

Why Mudra Loan Gets Rejected — And How to Avoid It

• Poor CIBIL score: Check score before applying — score below 650 is a red flag
• No proper documents: Business address proof and registration matter
• Bank account mismatch: Ensure bank account matches KYC name
• Existing loan default: Clear any existing dues before applying
• Vague business plan: For Kishore/Tarun, a clear plan with projected revenue improves chances