MUDRA Loan Apply Online: PM Mudra Yojana, Interest Rate & Eligibility (2026)

What is the PM MUDRA Yojana?

The Pradhan Mantri MUDRA Yojana (PMMY) is a government scheme that gives collateral-free loans of up to ₹20 lakh to micro and small businesses. MUDRA itself — the Micro Units Development and Refinance Agency Ltd — is a wholly owned subsidiary of SIDBI that refinances lenders, so the actual loans are disbursed by public and private banks, RRBs, small finance banks, cooperative banks, NBFCs and MFIs.

The scheme’s purpose is to fund income-generating, non-farm activities — a small manufacturing unit, a shop, a vendor cart, an artisan workshop, a service business, or an activity allied to agriculture like dairy, poultry or pisciculture. Since its launch in April 2015, over 51 crore loans worth more than ₹32.6 lakh crore have been sanctioned under the scheme, with roughly 68% of them going to women entrepreneurs.

MUDRA loan categories: how much can you get?

MUDRA loans are divided into categories by size, which also drives the repayment terms and margin expectations.

Tarun Plus was introduced in Budget 2024-25 and came into effect on 24 October 2024. It is reserved for entrepreneurs who have already availed of — and successfully repaid — a Tarun loan, so it rewards a clean repayment record with bigger, still collateral-free credit.

MUDRA loan interest rate

MUDRA does not fix an interest rate — the lending institution decides it, usually as a spread over a benchmark such as EBLR or MCLR. That is why two banks can quote different rates for the same category.

• State Bank of India publishes MUDRA category ranges — Shishu, Kishor and Tarun are priced in different bands ⚠️ confirm the current rate at your branch.
• As a reference, SBI has priced MUDRA loans around EBLR + 3.25%, which worked out to roughly 12.15% p.a. effective mid-February 2025 ⚠️. Benchmarks have moved since, so treat this as indicative, not current.
• Some lenders offer lower rates on smaller Shishu loans and preferential pricing for women-led businesses.
• There is no interest subsidy on MUDRA itself — the benefit is collateral-free, quick credit, not cheaper credit.

Who is eligible for a MUDRA loan?

• Any Indian citizen aged 18 or above.
• A non-farm income-generating activity — manufacturing, trading, services, or an activity allied to agriculture such as dairy, poultry, pisciculture, bee-keeping and agro-processing.
• Both new and existing businesses can apply; the loan can be used for working capital or a term purpose.
• Crop loans and land-improvement borrowing (canals, irrigation, wells) are excluded.

Because MUDRA is for non-farm activity, direct farming is out of scope — but anything that turns a small business into an income generator, from a roadside stall to a small workshop, is in scope.

Collateral and guarantee for MUDRA loans

The defining feature of MUDRA is that the loans are collateral-free. Loans up to ₹10 lakh need no collateral under RBI norms, and the Credit Guarantee Fund for Micro Units (CGFMU) — administered through the National Credit Guarantee Trustee Company — provides guarantee cover on the loans.

Guarantee cover is typically available for up to five years, matching the loan tenure. Lenders may still ask for a margin contribution — usually nil on loans up to ₹50,000 and around 20% of the project cost on larger loans, depending on the lender ⚠️.

MUDRA loan for women

Women entrepreneurs are the single largest beneficiary group of MUDRA — around 68% of loans sanctioned under the scheme have gone to women-led businesses. Women receive priority consideration under PMMY, and individual lenders often offer simplified processing or slightly better rates for women applicants.

There is no scheme-level statutory rate concession for women — any benefit is bank-specific. The practical advice is the same as for any applicant: compare a few lenders on Jan Samarth before you commit.

How to apply for a MUDRA loan online

The cleanest route is the government’s Jan Samarth portal, which lets you see offers from multiple lenders in one place instead of walking into bank branches one by one.

1. Open the Jan Samarth portal (jansamarth.in) and select the Business Activity Loan option.
2. Check your eligibility with your basic details and annual turnover.
3. Complete the OTP login using your Aadhaar-linked mobile number.
4. Upload your documents — photo, Aadhaar, PAN, address proof, bank statements and a business plan.
5. Review the loan offers from multiple lenders and select the one that suits you.
6. Complete the selected lender’s process and track your application to disbursal.

You can also apply through the Udyamimitra portal (udyamimitra.in) or through your bank directly. SBI, for example, offers e-Mudra — a fully digital MUDRA loan for existing SBI customers, with smaller amounts processed entirely online ⚠️ check the current channel with your bank.

Documents required for a MUDRA loan

• Passport-size photograph
• Aadhaar and PAN
• Address proof
• Bank statements — typically the last six months for Kishor and Tarun
• Business registration or trade licence, if applicable
• A simple project report or business plan for larger loan amounts

MUDRA vs PMEGP: which scheme fits?

Both schemes fund small businesses, but they are built differently. MUDRA is a collateral-free loan from your bank — no subsidy, quick, and available to new or existing businesses up to ₹20 lakh. PMEGP is a loan-plus-subsidy scheme for brand-new units, with the government contributing up to 35% of the project cost as margin money.

• Starting fresh and want a subsidy on top of the loan: PMEGP.
• Scaling an existing micro business or need working capital fast: MUDRA.
• Want collateral-free credit above ₹20 lakh: look at CGTMSE-backed MSME loans.

Frequently asked questions