PM Mudra Yojana (PMMY): Business Loans up to 10 Lakh for Micro Enterprises

The Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of the Government of India designed to provide affordable credit to non-corporate, non-farm small/micro-enterprises. These loans are extended through Commercial Banks, RRBs, Small Finance Banks, MFIs, and NBFCs to help generate self-employment and scale existing small businesses.

What is this scheme?

MUDRA (Micro Units Development & Refinance Agency Ltd.) acts as a refinancing institution. The scheme offers three distinct products—Shishu, Kishore, and Tarun—categorized based on the stage of growth and funding requirements of the micro unit or entrepreneur.

Who is eligible?

• Any Indian citizen with a business plan for a non-farm sector income-generating activity.
• Small manufacturing units and service sector units.
• Shopkeepers, fruits/vegetable vendors, and truck operators.
• Self-employed professionals and artisans.
• Maximum loan amount must not exceed 10 Lakhs (subject to latest government revisions).

How much money?

The scheme is divided into three categories: Shishu (Loans up to ₹50,000), Kishore (Loans above ₹50,000 and up to ₹5 Lakh), and Tarun (Loans above ₹5 Lakh and up to ₹10 Lakh).

Documents needed

1. Identity Proof (Aadhaar, Voter ID, PAN, Passport, etc.)
2. Proof of Residence (Electricity bill, Telephone bill, Aadhaar)
3. Applicant’s recent photograph
4. Proof of Business Identity/Address (Caste certificate if applicable)
5. Quotation/Invoice for machinery or items to be purchased
6. Business registration or license (for Kishore and Tarun categories)

How to apply (step by step)

1. Identify the loan category (Shishu, Kishore, or Tarun) based on your business requirement.
2. Approach a registered public/private bank, RRB, or NBFC participating in the PMMY scheme.
3. Submit the filled MUDRA application form along with the required KYC and business documents.
4. The bank or lending institution processes the application as per their internal credit policy.
5. Upon approval, the loan amount is sanctioned and the applicant receives a MUDRA Debit Card for working capital needs.

Important dates

Conclusion

The Mudra Yojana serves as a vital financial pillar for the 'missing middle' of the Indian economy. By providing collateral-free loans to micro-entrepreneurs, it fosters a culture of innovation and independence, contributing significantly to the nation's GDP and employment figures.