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PRADHAN MANTRI MUDRA YOJANA was launched by the Government of India in the budget of FY 2016 by the Honourable Finance Minister. MUDRA (Micro Units Development and Refinance Agency) is a Government initiative in order to facilitate easy and prompt loan availability to the Micro, Small and Medium Enterprises (MSMEs) ,i.e., to the non-corporate and non-farm sector. Under this scheme, loans can be provided easily to the eligible applicants without the need of any collateral or security. The range of the loans provided under the PRADHAN MANTRI MUDRA YOJANA is a minimum of Rs. 50,000 to a maximum of Rs. 10,00,000 in case of MSMEs.

Eligibility under PMMY

The main criterion for the eligibility under the PMMY is that all the small and micro enterprises (SMEs) should be from the Non-Corporate and Non-Farm Sector.

A few other criteria to be met for eligibility are,

  • The Applicant/Business should be engaged in income generating activities, i.e., generating minimum revenues
  • The Applicant/Business should be engaged in manufacturing, trading or service sector (including allied agricultural activities since 1st April 2016).
  • Loan amount needs of the Applicant/Business to be of a maximum Rs. 10,00,000.
  • The minimum and maximum age requirement under PMMY is 18 years and 65 years respectively.

MUDRA loans Under PMMY can be availed by any of the following entities,

  • Business owners
  • Shopkeepers
  • Professionals
  • Startup Entrepreneurs
  • Small Industrialists
  • Manufacturers
  • Persons involved in agricultural activities

Documents for PMMY

The documents required for the MUDRA Loans are basic KYC documentation like any other loan requirement.

Basic documents,


Passport, PAN Card, AADHAR Card, Voter’s ID Card, Driving License, Central and State Government issued Photo ID Proof, etc. (proof of being from a special category like SC/ ST/ OBC, Minority ,if applicable, also to be provided)


AADHAR Card, Ration Card, Bank Account Statement, Telephone Bill, Electricity Bill, Water Bill (Not more than 3 months old), etc.


Salary Slips (not more than 3 months old), ITR, Form-16, etc.

If the entity requires loan for working capital, or if loan is applied under KISHOR or TARUN categories, the additional documents required are,

Business Information

  • Business address proof
  • Business registration certificate
  • Proof of continuity of business
  • Director Identity Number or DIN for all the Directors, if any.
  • Photographs of the Applicant(s) or Director(s) or each of the partners
  • Total experience in the current line of business
  • Last 2 years actual sales
  • Projected sales figures, details regarding revenues, debtors and creditors of the entity, working cycles, inventories, promoter’s contribution, etc.
  • 2 years income tax returns
  • 12 months bank statements
  • Current financial year sales records
  • For a loan amount of more than Rs. 2,00,000 the applicant must provide the unaudited balance sheet of the previous year
  • Assets and liabilities statement of the company
  • Memorandum of Association (MOA), Articles of Association or Partnership Deed
  • Statuses regarding the Statutory Obligations have to be provided. E.g. Registration under the Shops and Establishment Act, Registration under MSME, latest Sales Tax filed, etc.

Banking /Credit Facilities Existing and Proposed

  • Types of facilities for savings bank account, current account, cash credit account, term loan account, letter of credit or bank guarantee
  • Current bank details
  • The total limit already availed and the amount proposed
  • The purpose of loan to be availed
  • A certification statement from borrowers ,if any, that no loan amount was procured from any other financial institutions or any other bank other than the one as mentioned in Section E

Term Loan Required for any Asset/Equipment

  • Type and purpose of such asset/equipment
  • Name of the supplier and the quotation of such asset or equipment
  • Promoter’s total contribution

Loan Details of PMMY

The loans provided under PMMY are divided in three categories based on the stage of business development that the organization seeking the loan is. The details of the loans are mentioned below.






UPTO Rs. 50,000

3-5 YEARS 



Rs. 50,001 – Rs. 5,00,000




Rs. 5,00,001 – Rs. 10,00,000



Rate of Interest

The interest rates across all the categories of the MUDRA Loans depend upon various factors. These factors are mentioned below.

  • Amount of loan sought
  • Applicants profile
  • Nature of business
  • Credit score

The interest rates are communicated by the bank to its customers after the completion of the loan submission and verification process.

Benefits of PMMY Loans

The PMMY loans are targeted for the growth and progress of the MSME sector and to provide them with the benefit of easy access to financing options. The PPMY launched with this aim has several benefits in store for the MSME sector. Some of these benefits are discussed below.

One of the main benefits of this scheme is the availability of funds without any need for collateral or security. The lenders provide finance to the eligible borrowers up to Rs. 10,00,000 without any collateral requirements.

Many lenders provide loans under PMMY without any processing charges. In other cases, the processing charges charged by the lenders are at very nominal rates.

The loans provided to the eligible units can be in any of the following form,

  • Term loans
  • Overdraft facility
  • Letter of credit
  • Bank guarantees

This enables the lenders to cater to a huge range of MSME requirements.

There is no minimum amount of loan prescribed under PMMY unlike many other traditional banking loan options.

The borrowers also get a MUDRA card upon receiving the loan sanction. This card can be utilized for withdrawal purposes from the MUDRA Account up to the permissible withdrawal limits.


1. How can a person apply for loans under PMMY?

Applicants can apply for loans under PMMY from the website of MUDRA at the following link, Persons can also apply for these loans through the website of the partner banks or financial institutions. Another way to apply for these loans is by going to the nearest branch or office of the bank or financial institution and directly applying for the loans there.

2. What are the eligible lenders under PMMY?

The eligible lenders under PMMY are the following entities,

  • Non Banking Financial Institutions
  • Micro Finance Institutions
  • Public Sector Banks
  • Private Sector Banks
  • Regional Rural Banks
  • Small Finance Banks

3. What is usually the processing time or turnaround time for MUDRA loans under PMMY?

Loans under PMMY are processed quicker (within 24 hours) as compared to traditional loans or loans under other schemes of the Government as a measure to boost the MSME Sector.

4. What are the main motives for MUDRA Loans under PMMY?

The loans under PMMY can be provided for any of the following purposes,

  • Working capital needs
  • Business Loans for vendors, shopkeepers, traders, service providers
  • Growth and expansion of business entities
  • Startup loans
  • Equipment financing
  • Loans to the transport sector
  • Loans for women entrepreneurs

5. What is the amount of loan that can be availed under PMMY?

Borrowers can avail a minimum of Rs. 50,000 and up to a maximum of Rs. 10,00,000 as loans under PMMY.

6. What is a MUDRA Card that is provided to the borrowers?

Borrowers under PMMY also receive a MUDRA card, essentially a RuPay Card, which can be utilized for various purposes by the business owners like,

  • for cash credit services
  • for overdraft facilities
  • as a debit card with Merchants at Point of Sale
  • for cash withdrawal from an ATM

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