Mudra Shishu scheme offers loans up to Rs.50,000 as collateral-free loans to eligible businesses. 

Snapshot of Mudra Shishu Loans

Mudra Shishu loans are offered as Term Loans or Working Capital Loans. Loans up to Rs.50000, with the rate of interest being a minimum of 1% per month or 12% per annum. Repayment period of 1-5 years. 

The PMMY Mudra Shishu Yojna is designed to provide for specific scales of operations, such as aspiring entrepreneurs or small businesses, and includes the following features:

  • Loan amounts of up to Rs.50,000 without collateral
  • No processing fees
  • Repayment period of 3-5 years
  • Flexible interest rates based on prevailing base rates
  • Applications may be submitted online or offline

What can the Mudra Shishu Loan be used for?

Mudra Shishu loans can be used as capital for start-ups, towards modernization of existing units, expansion of unit, purchase of equipment and machinery. 

Who is eligible to avail of the Mudra Shishu loan?

This loan can be availed by entrepreneurs looking to set up a new business or by established, profit-making entities, to expand their business.

Shishu scheme funding is primarily provided by Micro Finance Institutions (MFIs), which provide credit for a variety of micro-enterprises and small business activities. MFIs disburse loans to individual entrepreneurs for specific income-generating micro-enterprise/small business operations, regardless of whether the distribution model is through SHGs/JLGs/individuals.