Mudra LoanThe Government of India launched a flagship scheme called Prime Minister Mudra Yojana (PMMY) on 8th April 2015 to extend affordable loans to the non-corporate, non-farm micro and small enterprises to cater to their funding needs. One of the major aims of MUDRA loans was to bring the target audience into the formal financial fold.

What is MUDRA?

Micro Units Development and Refinance Agency Limited is MUDRA full form created as a refinancing institution providing loans up to Rs. 10 lakhs maximum to the eligible enterprises through the Commercial Banks, RRBS, Cooperative Banks, NBFC and MFI etc. The borrowers can approach the nearby branches of the lending institutions or apply for loans under the MUDRA scheme or apply online. At, we facilitate a seamless application process.

The genesis of MUDRA:

The largest economic sector of the country after agriculture comprises of non-corporate micro enterprises generating the bulk of the employment opportunities estimated to be approximately ten crores impacting the life of 50 crore Indians. They are mainly engaged in manufacturing, trading, processing and services, and the enterprises are broadly classified as proprietary or Own Account Enterprises (OAE). Understandably, this sector is deemed to be the economic bulwark of the country, yet it is reckoned to be the largest disorganised business eco-systems in the world. The NSSO survey of 2013 places the OAE at 5.77 crore units, which lie out of the ambit of the formal financial sector enjoying no credit facilities whatsoever. The MUDRA scheme under the aegis of the PMMY aims to be this huge sector into the fold of institutional credit, transforming them into a potent instrument of employment and GDP growth. The following data is indicative of the importance of the microenterprise sector and its potential role in GDP.

The broad parameters defining the Micro Enterprise Sector in India

Geographical composition of the sector





Composition of Own Account Enterprises by Engagement in Business activity







Structure of MUDRA:

It has been initially formed as a wholly owned subsidiary of SIDBI as a refinance company with an authorised capital of Rs.1000 crores and a paid-up capital of Rs.750 crores. The ambit of MUDRA is wide with the prime responsibility to develop and refinance micro enterprises engaged in eligible defined activities and support the financial institutions which are in the business of extending MUDRA loan scheme. In this endeavour, the PM MUDRA Yojana envisages partnering lending institutions at the micro level in the regional and state to facilitate Micro Finance in the country. Rightly so, the thrust on Micro Finance can engineer an economic development tool meeting the objective of provision of loans, financial literacy, employment generation and social support to the lowest strata of the society with ample opportunities to sustain life.

MUDRA Mission:

The mission statement of Pradhan Mantri Mudra Loan is to create an inclusive value based entrepreneurial culture which is sustainable in partnership with financial institutions in achieving financial security and success.

The key benefits of MUDRA loan:

  • Micro and small enterprises engaged in income generation are the prime target for extension of loan facilities.
  • The borrowers are not required to provide any collateral or security to avail of Mudra Loan.
  • There are no processing charges for availing of the loan.
  • The loans are provided for the funded and non-funded category, inducing an element of flexibility in the usage of funds.
  • The loans can be in the form of term loans, overdraft facility, letters of credit or bank guarantees, thus catering to a wide array of requirements.
  • The Mudra loan scheme does not prescribe any minimum amount.

MUDRA Loan Details:

The name of the type of loan facilities under the Pradhan Mantri Mudra Loan is suggestive of the developmental phases of an enterprise and the quantum of loan sanctioned. There are three Categories of the MUDRA loans based on the stated parameters making the business viable. Apply today at for all the named schemes.

1. Sishu: This loan is meant for entrepreneurs who are looking to start a business or in the process of establishing one. The maximum loan sanctioned under this category is Rs.50000. The basic norms of the loan are:

  • To provide finance for machinery.
  • Valid quotation and supplier details are essential.

2. Kishor: Under the MUDRA scheme, this category of loan is targeted towards entrepreneurs looking to expand their business through the infusion of fresh funds. Thus, the loan sanctioned under this category is in the range of Rs.50001 to Rs.5 lakhs. The key requirements for availing of this loan are:

  • The existing balance sheet for the previous two years.
  • Bank account statement.
  • Income and sales returns.
  • Estimated balance sheet for the current year.
  • Technical and economic viability of the project.

3. Tarun: The third type of loan under PMMY is for entrepreneurs who are well entrenched and have established themselves in the business and yet looking for further growth or diversification. The loan sanctioned under Pradhan Mantri Mudra Yojana for this type of loan is in the range of Rs.500001 to Rs.10 lakhs. The amount involved being the highest under the MUDRA Scheme, the requirements are more stringent than the other two loans. Some of the key requirements are:

  • All the requirements listed for Kishor Mudra Loan.
  • Address and Identity proof.
  • Caste certificate, if eligible for reservation.

The other features of MUDRA loan scheme can be summarised as:

  • There are three types of MUDRA loans.
  • There is no minimum amount of loan.
  • The maximum amount of loan is Rs.10 lakhs.
  • There is no security of collateral for the loan.
  • There is no processing fee.
  • Primarily the loan facilities are extended to non-corporate non-farm enterprises. However, farm sector enterprises involved in allied services like fisheries, food processing and horticulture, to name a few are eligible.

Eligibility for MUDRA Loan Application:

Enterprises and entities falling under the following categories comprise MUDRA loan eligibility.

  • All non-corporate non-farm enterprises.
  • Primarily engaged in income generation through manufacturing, trading and services.
  • Where the requirement of credit is for maximum Rs.10 lakhs or lower.
  • Engaged in allied agriculture services since 1st April 2016.

MUDRA loan Interest Rate:

The interest rate applied on MUDRA loans are based on RBI defined MCLR (Marginal Cost of Lending Rate) with the following break-up.

Up to Rs.50000:

  • Micro Enterprises: MCLR + SP
  • Small Enterprises: (MCLR + SP) + Bank Load

Above Rs.50000 up to Rs.2 lakhs:

  • Micro Enterprises: (MCLR + SP) + Bank Load
  • Small Enterprises: (MCLR + SP) + Bank Load

Above Rs.2 lakhs up to Rs.10 lakhs:

  • Micro Enterprises: (MCLR + SP) + Bank Load
  • Small Enterprises: (MCLR + SP) + Bank Load

Why for Business Loan?

When it comes to ease of seeking lending facility; we at Lendingkart score over others in a number of ways. We are a non-deposit NBFC in the business of lending providing credit with a range of products:

At Lendingkart, our focus is not on the past antecedents of the prospective borrower, but the potential and the credit risk of our clients with an emphasis on the current cash flows and business growth. We are well endowed with the services of our fin-tech start-up arm, providing an accurate assessment of the creditworthiness of clients through the accumulation of data from various sources and efficient analysis tools. The key factors that make us at Lendingkart the choice destination for our range of loan products are:

  • Though working out of Ahmedabad, Bengaluru and Mumbai at present, the services are extended pan India.
  • Ease of online application in full that takes only a few minutes to complete.
  • Fewer documents are sought.
  • The absence collateral security.
  • Disbursal of loans is the quickest in the industry, which is ensured in three days.

In fine, we at aim to provide a seamless credit experience to our clients to conveniently concentrate on the business rather than on the cash flow gaps.

Mudra Loan FAQs:

1. Can MUDRA loan application form be submitted online?

Yes, you can apply online visiting the official website Mudra loan -, But you need to have proper business plan to apply business loan.

2. Which are the required MUDRA loan documents?

The documentation is simply based on the type of loan applied for.

3. What is the main purpose of MUDRA Loan?

The basic aim being income generation, the purpose of the loan serves:

4. What is MUDRA card?

It is a digital facility introduced for working capital needs under cash credit of MUDRA loan granted Rupay branding by NPCL.

5. Does MUDRA scheme extend portfolio guarantee?

Yes, under the MUDRA Credit Guarantee Scheme promoted by the Government of India to mitigate collateral and security concerns of the lending institutions.

6. What is MUDRA Credit Plus?

It aims to build a business eco-system by offering the following:
  • Counselling centres for financial literacy.
  • Imparting product knowledge.
  • Oversee credit absorption capacity.
  • The need for products and services.

7. What are the synergies aligned with PMMY?

The major schemes of the Government like Make in India, Stand-Up India and Start-up India are the synergies aligned with the MUDRA loan scheme.

8. What is the normal repayment of MUDRA loans?

The normal term of repayment is 12 to 60 months.

9. What is the processing time of MUDRA loan?

It is normally processed in 24 hours.

10. Do the lenders offer pre-approved MUDRA loans?

Some lenders do offer to existing customers through the MUDRA loan application process.