Mudra loan is a Government of India undertaking, which was started to provide financial support to small businesses in the country. 

Under Mudra Loan Yojana, three different types of loans are provided:

  • SHISHU Loan - This loan specifically for startups  provides financial support of up to Rs. 50,000.

  • KISHOR Loan - This loan is for businesses that require financial help for establishing themselves. Under this category, a loan amount of  Rs. 50,000 to Rs. 500,000 is provided to applicants.

  • TARUN Loan - This loan is for businesses that require financial help for expansion. Financial support ranging between Rs. 500,000 and Rs. 10,00,000 is provided to applicants under this category.

Under the Mudra Yojana, women entrepreneurs can avail funds of up to Rs.10 lakh to start, establish or expand a small or micro-enterprise, provided it is a non-corporate or a non-farm business. In order to encourage women entrepreneurs,  the lenders may consider extending additional facilities, including interest reduction on loans. At present, MUDRA extends a reduction of 25bps in its interest rates to MFIs / NBFCs, who are providing loans to women entrepreneurs.