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e-MUDRA Loans - Pradhan Mantri MUDRA Yojana (PMMY)

The establishment of MUDRA bank was announced by Hon'ble Finance Minister Shri Arun Jaitley during the Union Budget session of FY 2015-16. It was formed with the main goal of empowering small businesses and entrepreneurs. Accordingly, it was launched by the Hon'ble Prime Minister Shri Narendra Modi on 8th April 2015. There are several provisions under the scheme to assist the MSME sector, that will fully meet customer needs and will effectively cover certain locations that ordinary banks are unable to cover.

MUDRA loans that are applied online are called e-MUDRA Loans. E-MUDRA loans can be applied from a number of commercial and public sector banks, Small Finance Banks, NBFCs and MFIs. They can also apply online through the Udyami Mitra Portal. The loan scheme was introduced with the objective of aiding financial institutions to extend loans to the non-corporate non-farm sector income generating activities of micro and small entities (subject to those enterprises with credit needs below Rs.10 lakhs).

What are the goals and objectives of e-MUDRA Loans?

Large scale industries have never had any difficulty in securing credit for their enterprises, because of the perception that they offer the highest employment opportunities to the general population. It is shocking though, to find out that large industries employ only 1.25 crore people countrywide. It is the small scale industries, which falls under the unorganized sector, that employs around 12 crore people in this country. Despite this fact, they do not have adequate credit facilities. It is to combat this situation that the Prime Minister envisaged the Micro Units Development & Refinance Agency Ltd (MUDRA) scheme.

This scheme is primarily aimed at MSME units across the country. It was established with the sole purpose of funding and saving small entrepreneurs from abuse by money lenders and helping 1.5 crore new entrepreneurs in developing small businesses. The MUDRA scheme offers loans that do not need collateral. Under this arrangement there is no fixed rate of interest on the loans availed. Interest is charged at the base rate plus 1–7%. This can also be higher, depending on the risk involved and the profile of the customer.

The MUDRA scheme has been a boon to the MSME sector by giving collateral free financing to these budding enterprises.

  • Refinance support to banks and NBFCs to facilitate higher funds available for lending
  • Onward lending to business entities involved in manufacturing, trading, services, tractor financing, agriculture and allied activities, and two-wheeler loans
  • MUDRA also empowers MSME entities through financial literacy and other social support services in addition to financial assistance
  • MUDRA has three loan schemes under it – Sishu loan up to Rs. 50000, Kishore loan up to Rs. 5,00,000 and Tarun loan up to Rs. 10 lakh

What are the benefits of the MUDRA Scheme?

The MUDRA Yojana scheme offers the following advantages over other MSME financing schemes in the market:

  • There is no collateral needed for this loan, so you can borrow without losing any personal or business property.
  • In the event of default, the government assumes responsibility for paying the loan.
  • This loan is most beneficial to entrepreneurs looking to set up their micro enterprise.
  • You can use this loan to fund, develop and expand your company with up to Rs.10 lakh funding.
  • The MUDRA Yojana scheme is available for small businesses in both urban and rural areas.
  • Women borrowers can get better benefits due to lesser interest rates.
  • The tenor of the loan may be extended to even 7 years, or you may choose to repay your loan within a shorter period of time.
  • Helps you to meet the work capital needs of your company.
  • Being part of the Pradhan Mantri Jan-Dhan Yojana, this loan also allows you to take advantage of the overdraft facility balance of up to Rs.5000.
  • One can also apply for a MUDRA debit card that provides them with hassle-free instant access to funds.

What are the different categories under the MUDRA scheme?

The MUDRA Yojana has a few different schemes under different categories. 

  • Micro-credit scheme: Micro-enterprises, self-help groups and joint-liability groups can get up to Rs.1 lakh through micro-finance institutions.
  • Women Enterprise Program: This program, also known as the Mahila Uddyami Yojana, offers interest rate concessions of up to 0.25% on loans to women business owners at affordable rates.
  • Refinance scheme for Banks: This scheme allows borrowers such as commercial banks, regional rural banks, and scheduled cooperative banks to refinance loans up to Rs.10 lakhs if they have provided micro-enterprises credit based on requirements.
  • MUDRA Card overdraft: This card provides beneficiaries to make the most of overdraft facilities in addition to allowing debit transactions and withdrawals from ATMs. It also makes a mechanism for cash-credit to access working capital financing.
  • Credit Guarantee Fund: This fund was created to provide finance to increase accessibility and ease of lending to micro units.
  • Equipment Finance Scheme: This scheme provides limited equipment finance with an emphasis on enabling businessmen to buy and update their machinery.

Basic Eligibility Criterion to apply for MUDRA Scheme

In order to apply for the e-MUDRA scheme, your business should be either one of the following:

  • Small manufacturing enterprises (MSMEs)
  • Shopkeepers
  • Fruit and Vegetable vendors
  • Artisans
  • 'Activities allied to agriculture', e.g. pisciculture, bee keeping, poultry, livestock, rearing, grading, sorting, aggregation agro industries, diary, fishery, agriclinics and agribusiness centres, food & agro-processing, etc. (excluding crop loans, land improvement such as canal, irrigation and wells).

What purpose can the MUDRA Loan be utilized for?

The MUDRA loan can be availed by MSME Entrepreneurs from the following sectors 

  • Transport Vehicle: Purchase of transport vehicles for transportation of goods and passengers such as auto rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, taxis, etc. Tractors/Tractor Trolleys/Power Tillers used only for commercial purposes are also eligible for assistance under PMMY. Two Wheelers used for commercial purposes are also eligible for coverage under PMMY.
  • Community, Social & Personal Service Activities: Salons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shops, DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc.
  • Food Products Sector: Activities such as papad making, achaar making, jam/jelly making, agricultural produce preservation at rural level, sweet shops, small service food stalls and day to day catering / canteen services, cold chain vehicles, cold storages, ice making units, ice cream making units, biscuit, bread and bun making, etc.
  • Textile Products Sector / Activity: Handloom, power loom, Khadi activity, chikan work, zari and zardozi work, traditional embroidery and hand work, traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non garment products such as bags, vehicle accessories, furnishing accessories, etc.
  • Business loans for Traders and Shopkeepers: Financial support for lending to individuals for running their shops / trading & business activities / service enterprises and non-farm income generating activities with beneficiary loan size of up to Rs. 10 lakhs per enterprise / borrower.
  • Equipment Finance Scheme for Micro Units: Setting up micro enterprises by purchasing necessary machinery / equipment with per beneficiary loan size of up to Rs.10 lakhs.
  • Activities allied to agriculture: 'Activities allied to agriculture', e.g. pisciculture, bee keeping, poultry, livestock-rearing, grading, sorting, aggregation agro industries, diary, fishery, agri-clinics and agribusiness centres, food & agro-processing, etc. (excluding crop loans, land improvement such as canal, irrigation and wells) and services supporting these, which promote livelihood or are income generating shall be eligible for coverage under PMMY in 2016-17.

What are the types of credits extended under the MUDRA scheme?

The MUDRA scheme offers a very simple way of applying to the finance scheme. To make it easier, the scheme is streamlined into 3 categories:

Shishu: Start-ups seeking a loan up to an amount of Rs. 50,000 can apply for a loan under this classification. The rate of interest would be 10–12%.

Kishor: Unestablished business units seeking a loan amount of Rs. 50,000 up to Rs.5 lakhs can apply for a loan in this category and will have to bear an interest rate of 14–17%.

Tarun: Established businesses looking for expansion of their existing unit can apply for a loan under this category with funding of up to INR 10lacs. The interest rate ranges above 16%.

What is E-MUDRA?

The Government has been encouraging digital banking across the country. It has introduced a number of measures to ensure that most banking facilities are available on the digital platform. In order to provide a transparent application process for the MUDRA loan and to enable entrepreneurs to access these loans from their place of business, e-MUDRA was introduced.

Applicants can conveniently apply for the MUDRA loans online by choosing the desired loan amount and their preferred lender. As mentioned earlier, MUDRA loans are disbursed through banks, MFIs and NBFCs. With the online application process, the applicants can submit their loan application and other documents and also choose their preferred lending partner for a quicker loan application.

There are various ways to access e-MUDRA

  • Through the Udyami Mitra Portal
  • Through the MUDRA Mitra Portal
  • Through the Bank or Lending Institution’s official website – SBI, HDFC, ICICI, Bajaj Finserv, Lending Kart, etc;

How to apply for an e-MUDRA Loan?

The primary portal to apply for the e-MUDRA loan is via Udyami Mitra. This is the official portal setup by MUDRA for applicants to learn everything about this loan scheme, eligibility criteria, required documents and the application process.

The Loan process is as below: 

Register Choose Hand Holding Support Fill Application Form Apply to Preferred Lender

Benefits of applying through Udyami Mitra

  • The benefit of applying through Udyami Mitra portal is that your application is viewed by multiple lenders at the same time.
  • HAVE – Hand Holding in a Virtual Environment - If you find any difficulties in filling the application form, you can choose a Hand Holding agency or person to help you (fees may be charged by the agency / person) with filling up the application

The loan processing is as below: 

Step 1: Registering on the Portal – You have to fill in your basic details like name, email address, mobile number, address, business address and the required loan amount to register on the Portal.

Step 2: Submitting details pertaining to the business – The applicant has to submit financial details of the business unit. You have to include details on the proprietors, nature of the business, estimated profit, estimates of the machinery planning to be purchased, existing credit facilities and so on.

Step 3: Submitting supporting documents: The applicant is required to submit a self-attested copy of all the supporting documents. These documents have to be uploaded along with the application.

Step 4: Select the preferred lending partner: You can choose your preferred bank to process your application.

Once you are deemed eligible by the chosen bank to secure a loan under the MUDRA Scheme, the loan is disbursed in the form of a pre-loaded MUDRA Card that comes personalized with your name on it. This is a RuPay debit card that is attached to the Pradhan Mantri Jan Dhan Yojana Savings Account and allows you to conveniently withdraw from any ATM when purchasing for your business. The cash withdrawal limit is set at Rs. 25,000 per day and includes cash credit and current deposit accounts as well.

Documents required to apply for e-MUDRA loans:

Proof of identity
The MUDRA loan documents list includes self-attested photocopies of:

  • Aadhaar card
  • PAN
  • Voter’s ID
  • Driving License
  • Passport
  • Valid photo ID card issued by a Government employer

Proof of address
Proof of address documents required for MUDRA loan include:

  • Utility bill (electricity, telephone, water, gas, post-paid mobile phone, property tax)
  • Aadhaar card
  • Passport
  • Voter’s ID
  • Bank passbook or latest bank account statement attested by officials.
  • Domicile certificate or certificate issued by a local government body (Municipality, Gram Panchayat, etc.)

Proof of business
Proof of business documents for MUDRA loan:

  • Certificate, license, registration, or any other documents confirming the business existence, address, and ownership.

Other MUDRA loan documents

  • Photos of the business owners, partners, etc.
  • Proof of SC, ST, OBC, etc.
  • Balance sheet of last 2 years
  • Income/sales tax returns
  • Bank account statements
  • Partnership deed or memorandum and articles of association
  • Sales made during the current FY and up to the loan application filing
  • Estimated balance sheet for 1 year or for the loan tenor
  • Business report certifying economic and technical viability of the business

SBI Bank e-MUDRA Loans

The State Bank of India has been at the forefront of implementing various Government schemes to deliver financial aid to deserving borrowers. The MSME lending division has various loan products to aid this segment with the much needed credit.

MUDRA Loan Eligibility Criteria for SBI Bank

MUDRA Loans can be availed by entrepreneurs looking to set up a new business or by established, profit making entities, to expand their business. The loan can be applied by people engaged in Non–Corporate Small Business Segment (NCSB) from both rural and urban areas. This segment comprises of millions of proprietorship or partnership firms running as Small Manufacturing Units, Service Sector Units, Shopkeepers, Fruits & Vegetable Vendors, Truck Operators, Food-service Units, Repair Shops, Machine Operators, Small Industries, Artisans, Food Processors and others.

Start-up applicants should present a viable business model, depicting the profit making ability of the business model to avail this loan. Start-ups are usually categorized under the Shishu scheme and get up to Rs.50000 loan amount.

Established business units, already into profit making, can apply under the Kishor and Tarun categories for credit towards expansion of business or upgradation of machinery and equipment. These applicants have to submit proof of profits and also substantiate the need for machinery and equipment upgradation. They have to explain how this expansion or upgradation can help in bettering their profits and also create more employment opportunities.

How to apply for SBI e-MUDRA loans?

MUDRA loans can be applied through the SBI online customer portal. Existing customers of SBI, maintaining Saving Bank or Current Account (Individual), can apply for e-MUDRA loan of amount up to Rs. 50,000 online on their official website SBI e-Mudra Loan

Nature of credit

Offered as a Term loan or Working capital


Capital for start-ups, modernisation of existing units, expansion of unit, purchase of equipment and machinery

Eligible borrowers

  • Entrepreneurs looking to setup a new business or by established, profit making entities, to expand their business.
  • The applicant should be between 18 and 60 years of age.
  • The deposit account should have been active for a minimum of 6 months.

Quantum of loan

Maximum loan amount: Rs.10 lakh

SHISHU category - Loans up to Rs. 50,000

KISHORE category - Loans from Rs. 50,001 to Rs. 500,000

TARUN category - Loans from Rs. 500,001/- to Rs. 10,00,000/-

Repayment tenure

3 – 5 years

Processing fee

Nil for Shishu and Kishore loans

0.5% of the loan amount for Tarun loans


Nil for loan up to Rs. 50,000

10% for loan amount from Rs. 50,001 to Rs. 10 lakh

Interest rates

Linked to MCLR rates

Collateral security

No collateral required. However, as Primary Security, hypothecation of P&M for Term loans and hypothecation of stocks and receivables for Cash credit to be done.

Borrowers can opt to get RUPAY Debit Cards named as MUDRA Card for cash withdrawals & PoS transactions. Their features under each of the 3 categories is given below:


Daily cash withdrawal limits




Daily POS Limit




Documents Required for SBI MUDRA Loan

ID Proof: Voter’s ID card, Driving License, PAN Card, Aadhaar Card, Passport or Photo IDs issued by a Government authority.

Residence Proof: Recent telephone or electricity bill, property tax receipt, Voter’s ID card, Aadhaar Card, Passport, and Certificate issued by a government authority, local Panchayat or municipality, among others.

Bank Statement: Last 6 months’ bank statement from their existing bank, if any.

Quotations for proposed purchase of equipment or machinery: The application should be accompanied by the quotation for the machinery and other items that have to be bought for the business.

Photograph: 2 recent passport size photograph of the applicant.

Caste certificate in case of SC, ST, OBC, or minority group, if applicable.

Business Proof: These may include copies of relevant licenses, registration certificates, and lease or rent agreements, or other documents that are establish the ownership, identity and address of the business unit. Businesses with Udyog Aadhaar Memorandum can submit the same also.

Income Tax Documents: IT returns of past 2 years for individuals and business entities should be submitted.


Once your loan application has been approved, you will be given a MUDRA card loaded with the loan amount. This is a RuPay debit card that is attached to the Pradhan Mantri Jan Dhan Yojana Savings Account and allows you to conveniently withdraw from any ATM when purchasing for your business. The cash withdrawal limit is set at Rs. 25,000 per day and includes cash credit and current deposit accounts as well.

It is a RUPAY debit card issued against the amount on your MUDRA loan account, for the working capital portion of the loan. MUDRA Card allows multiple withdrawals and credits, and enables you to manage the working capital limit in a cost-efficient manner and keep the interest burden low. MUDRA Card also helps in digitalization of MUDRA transactions and creating credit history for the borrower. MUDRA Card can be operated across the country for withdrawal of cash from any ATM / micro ATM and also make payment through any ‘Point of Sale’ machines.

e-MUDRA Loans FAQs:

1. Who is eligible for this credit facility from MUDRA? What kind of borrowers are covered under the MUDRA scheme?

This scheme primarily focuses on Non-Corporate Small Business Segment (NCSBS) comprising largely of proprietorship and partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits and vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.

2. What kind of assistance can one get for food processing units?

Food Processing is very much covered under one of the MUDRA schemes. Please contact your nearest SBI Bank to know more about the relevant scheme. You can avail assistance under MUDRA schemes as per your requirements.

3. The MUDRA loans give priority to women, Dalits and SC/ST. I am a woman who has completed Beauty Parlour training and would like to set up my own beauty parlour. Which category of MUDRA should I apply for a loan with?

The Mahila Uddyami Scheme is specially designed for women entrepreneurs and is covered under MUDRA. Under this scheme, women can avail assistance under all three groups, viz. 'Shishu', 'Kishor' and 'Tarun'. Please approach the nearest branch of SBI Bank with your business proposal and supporting documents. They will let you know of the best interest rates and other offers to suit your needs. Please check udyamimitra for more information for eligible businesses under each category.

4. Is MUDRA only for rural people or can people in urban areas also apply for an SBI MUDRA loan?

MUDRA loan caters to entrepreneurs from both the rural and urban areas. People in urban areas can also apply for an SBI MUDRA loan.

5. What is a MUDRA Loan Card?

MUDRA Loan Card is a credit card that has a credit limit up to the working capital portion of the SBI MUDRA loan, more commonly known as a MUDRA Card. It can be used to make purchases for the business as a debit-cum-ATM card and also at POS terminals.

6. Do I require to pledge any collateral for the MUDRA loan?

MUDRA loan does not require any collateral from the borrower, as RBI has mandated that all loans up to Rs. 10 lakhs to the MSE sector will not need any collateral. The bank however requires the borrower to hypothecate (pledge) the stocks, machinery, movables, or any other items acquired with the money from the SBI MUDRA loan with the bank for the tenure of the loan.

7. What is the eligibility for availing MUDRA loans?

Any Indian Citizen who has a business plan for a non-farm income generating activity such as manufacturing, processing, trading or service sector whose credit need is up to Rs. 10 lakhs can approach either a Bank, MFI or NBFC for availing of MUDRA loans under PMMY. The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The lending rates are as per the RBI guidelines issued in this regard from time to time.

8. Please brief me about the MUDRA Card

MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner. It will provide a facility of working capital arrangement in the form of CC/OD to the borrower. Since a MUDRA Card will be a RuPay debit card, it can be used for drawing cash from an ATM or Business Correspondent or make purchases using a Point of Sale (POS) machine. Facility is also there to repay the amount, as and when surplus cash is available, thereby reducing the interest cost.

Latest & Update E Mudra Loan News

PMMY Completes Six Years with Loans worth Rs. 14.96 lakh crores Disbursed Till Date16 Apr 2021

The Finance Ministry in a press release stated that PMMY (Pradhan Mantri Mudra Yojana) has completed six years in India since its launch on 8th April 2015. As of 19th March, the PMMY scheme has provided loans to 28.68 crore borrowers with loans over ...

Read more

The Finance Ministry in a press release stated that PMMY (Pradhan Mantri Mudra Yojana) has completed six years in India since its launch on 8th April 2015. As of 19th March, the PMMY scheme has provided loans to 28.68 crore borrowers with loans over Rs. 14.96 lakh crores. The key achievements of this scheme include: 68% of loans under this scheme have been provided to women entrepreneurs; 88% of the loans are offered under SHISHU and 24% of loans have been sanctioned to new entrepreneurs. Check your eligibility for MUDRA loans online and apply to make your entrepreneurial dreams come true.

150 Million Women Availed loans under the MUDRA Yojana: Says Union Minister Smriti Irani15 Oct 2020

In a webinar organised by FICCI, the Union Minister for Textiles, Women and Child Development, Smriti Irani highlighted that over 150 million women have availed collateral-free loans under the PMMY (Pradhan Mantri Mudra Yojana). The PMMY is a loan-sc...

Read more

In a webinar organised by FICCI, the Union Minister for Textiles, Women and Child Development, Smriti Irani highlighted that over 150 million women have availed collateral-free loans under the PMMY (Pradhan Mantri Mudra Yojana). The PMMY is a loan-scheme introduced on 8th April 2015 to provide collateral-free loans up to Rs. 10 lakhs to non-farm MSMEs. Available at affordable rates and easy eligibility, MUDRA loans act as a stepping stone helping women achieve their entrepreneurial dreams.

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