The maximum loan amount one can borrow under the MUDRA scheme is up to Rs. 10 lakhs and with a maximum repayment tenure of 5 years. The MUDRA scheme offers refinance support to banks and NBFCs that offer loans to MSMEs under the Pradhan Mantri MUDRA Yojana.
The maximum amount that you can borrow depends on the MUDRA category under which you apply. Entrepreneurs and MSMEs can apply MUDRA loans under any one of the following three categories:
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Shishu: offers loans up to Rs. 50,000. Best suited for small startups and entrepreneurs who are just getting started.
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Kishor: offers loans ranging from Rs. 50,000 to Rs. 5 lakhs. Ideal for medium enterprises that are looking to expand.
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Tarun: offers loans ranging from Rs. 5 lakhs to Rs. 10 lakhs. Ideal for fully-established businesses that have been operational for several years.
MUDRA loans is a welcome initiative offered by the government. It helps self-employed professionals, MSMEs and entrepreneurs avail formal credit at a reduced interest rate compared to regular business loans from commercial banks. Another huge perk of MUDRA loans is that the documentation and application process is hassle-free, helping business owners secure the needed credit quickly.