About this programme
PMMY is a flagship collateral-free microfinance scheme launched in April 2015 to facilitate easy access to credit for non-corporate, non-farm micro and small entrepreneurs. The scheme provides loans up to Rs 20 lakh (increased from Rs 10 lakh in October 2024) through four categories: Shishu (up to Rs 50,000), Kishore (Rs 50,001-Rs 5 lakh), Tarun (Rs 5-Rs 10 lakh), and Tarun Plus (Rs 10-Rs 20 lakh). Loans are disbursed by banks, NBFCs, and MFIs without collateral requirement. It is run by Government of India — MUDRA / SIDBI.
The support is delivered through the programme’s own structure, and the form it takes is set by the issuing authority. The amount and form of support that actually apply to you depend on the programme’s rules and how your application is assessed — they are not fixed for every applicant.
It is aimed at businesses in manufacturing, trading, services, allied agriculture - non-farm. Like most government programmes, it has its own eligibility conditions, documentation and application window, and these terms are revised from time to time. Because of that, it is worth confirming the current eligibility, amount and deadline on the official programme page before you invest time in applying.
How it works
Borrower applies to any Member Lending Institution (banks, RRBs, SFBs, NBFCs, MFIs) with a basic business plan. Loans are collateral-free and unsecured. Credit is provided based on applicant credibility and business viability. Member Lending Institutions disburse loans directly; SIDBI provides refinance support to MLIs.
Who can apply
Any individual 18+ years old with a business plan for small business enterprise in manufacturing, trading, services, or allied agriculture sectors. Non-corporate, non-farm entrepreneurs eligible. Women account for 68% of beneficiaries. Preference given to first-time entrepreneurs and those without prior access to formal credit.
How to apply
- Download one-page Shishu application form or 3-page Kishore/Tarun application from MUDRA website
- Approach any Member Lending Institution (bank, NBFC, or MFI)
- Submit application with business plan to the lender
- Lender evaluates and sanctions the loan within stipulated timeframe
- Receive loan disbursement directly to bank account without collateral
Documents you’ll typically need
- Business plan
- Identity proof (Aadhaar/PAN/Voter ID)
- Address proof (electricity bill/telephone bill/rent agreement)
- Bank account details
- For Kishore/Tarun categories: Detailed project report for projects above Rs 5 lakh
The exact checklist depends on the programme and your specifics.
Frequently asked
Is collateral required for MUDRA loans?
No, MUDRA loans are completely collateral-free and unsecured.
What is the difference between the four loan categories?
Shishu (up to Rs 50,000) for new entrepreneurs; Kishore (Rs 50,001-Rs 5 lakh) for growing businesses; Tarun (Rs 5-Rs 10 lakh) for established businesses; Tarun Plus (Rs 10-Rs 20 lakh) for previously successful Tarun borrowers.
Who can apply for MUDRA loans?
Any individual 18+ years old with a viable business plan in manufacturing, trading, services, or allied agriculture sectors. Non-corporate, non-farm entrepreneurs are eligible.
Which institutions disburse MUDRA loans?
Member Lending Institutions including Scheduled Commercial Banks, Regional Rural Banks, Small Finance Banks, Non-Banking Financial Companies, and Micro Finance Institutions.
Reviewed July 2026. Government programmes change — confirm current eligibility, amounts and deadlines on the official programme page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.