A Complete Guide To The PM Mudra Yojna 2024

A Complete Guide To The PM Mudra Yojna 2024

The only guide you will need to understand the PM Mudra Yojna
indiagold team
25 Mar 2022
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how to take PM Mudra loan

A growing number of micro, small, and medium businesses (MSME) based in India often find it challenging to get formal finance, even though these enterprises employ more than 12 crore people. For these enterprises, borrowing from an informal source, whether for their asset acquisition, marketing-related expenses, or the working capital, is costly and ultimately undermines the company's operations.

To assist these micro-units, small businesses, entrepreneurs, service sector enterprises, and manufacturing units fulfill their working capital requirements in the early stages of development, the Government of India has set up the PM Mudra Yojana (PMMY) program on April 8, 2015. The program allows qualified entrepreneurs and businesses to borrow up to ten lakhs of rupees.

What Is PM Mudra Yojana?

The Pradhan Mantri Mudra Yojana (PMMY) is the flagship program of the Government of India to provide affordable financing to small and micro-businesses. These loans are designed to help bring underfunded projects into the official financial system. Non-agriculture, minor or small businesses engaged in wage creation via manufacturing, trade, or essential services can apply for credit under the Pradhan Mantri Mudra Yojana. These loans are also available to businesses involved in cooperative agricultural operations.

Eligible candidates will be given a loan for five years, during which they must repay the loan in line with the EMIs set by the lending institutions. Because the financing charges are negligible, applicants will not find it difficult to pay the parts.

In this way, a Mudra loan allows businesses to work, create, and grow their companies without putting too much strain on their daily schedules and finances. indiagold offers safe and secure gold loans which can be availed by business owners to get reliable credit instantly at the comfort of their homes.

Financial Products Offered Under PM Mudra Yojana

For qualifying organizations, the PMMY Yojana provides three products: Shishu, Kishore, and Tarun. Here are the details of these three products offered under the scheme:

Shishu Loan

Shishu loans, available via the PM Mudra Yojana, enable entrepreneurs to establish a company to borrow up to ₹50,000. To apply for a Shishu Mudra loan, you must provide the following information.

  • The quotation for the equipment and any additional goods being bought that may be required
  • The details of the equipment and machinery that have been acquired
  • The details of the company supplying the equipment and machinery

Kishore Loan

Kishore loans are typically between ₹50,000 and ₹5,000,000. They are excellent for entrepreneurs that need extra financial resources to grow their company. Here's a list of the papers you'll need to apply for this loan:

  • The company's balance sheet over the last two fiscal years
  • Returns on income tax and sales tax
  • Bank account statements of the previous six months
  • Balance sheet projections for the next year or the term of the loan sought
  • If applicable, the Memorandum of Association and Articles of Association
  • A report examining the technical and economic viability of an applicant’s business

Tarun Loan

The PMMY program offers Tarun loans ranging from ₹5,000 to ₹10,000. In addition to the papers required for a Kishore loan, business owners seeking a Tarun loan must provide the following documents:

  • Address proof (Residence certificate, Aadhaar card, electricity bill, government-issued documents, water Bill)
  • Identification proof (PAN card, Aadhaar card, driving license, voter ID, passport, bank passbook)
  • Two photographs
  • If applicable, a certificate of SC, ST, or OBC

Interest Rates & Fees for Mudra Loans

Rates of Interest

The lending institution's assessment and the applicant's background and business requirements determine the interest rate on a Mudra loan.

Fees for Processing the Loan

For sums up to ₹50,000, there is no processing charge on a Mudra loan. In addition to GST, a ten percent interest rate and a 0.50 percent processing charge are applied to sums between ₹50,001 and ₹10,000,000.

Eligibility for Procuring PM Mudra Yojana Loan

Mudra Finance provides loans to rural and urban India's non-corporate, non-farming micro, small, and medium businesses (MSMEs). If you are a small manufacturer, shopkeeper, artisan, individual in agriculture, or a fruit and vegetable dealer, you may be eligible for the PMMY loan. Also, if you are not eligible for PM Mudra Yojana Loan you can always go for collateral backed Indiagold gold loans.

Mudra loans are offered through the following lending institutions:

  • Public and private sector banks
  • Non-banking Financial Companies (NBFCs)
  • Regional Rural Banks (RRBs)
  • Small Finance Banks (SFBs)

How to Get a Mudra Credit?

There are 29 banks listed under the PMMY scheme. You may go to any of these banks listed for lending loans under the scheme to complete the process as described below:

  • Visit the nearest listed commercial or private bank.
  • Outline your company strategy/plan.
  • Present the structure of your properly completed credit application.
  • The additional documents to be provided are identity confirmation, address proof, organization address verification, organization character evidence, station authentication, asset reports, IT returns, and other information required by the lending financial institution.
  • Complete all other additional procedures stated by the bank.

Once you submit the required documents, your claims will be verified, and the credit will be granted accordingly.

Mudra Loan Purpose and Benefits


MSMEs (Micro, Small, and Medium Enterprises) have contributed to India's ever-growing economy and play a vital role in creating employment throughout the country. Keeping in mind these considerations, the Indian government established the Mudra scheme to assist small companies and start-ups.


The Mudra loan scheme comes with several advantages that can help you achieve your business goals. The most significant benefits are:

  • The main advantage of the PM Mudra loan is that it is offered without collateral and can be used to develop and expand your business. Collateral may be challenging for a young or emerging company. Hence, this is where a Mudra loan may be of great value.
  • Mudra loan is provided at a nominal rate of interest. The monthly interest rate chosen by individual banks is not more than 1%.
  • Once the loan has been authorized, the loan amount may be withdrawn at any time using the Mudra Loan card, eliminating the need for the recipient to visit the bank.

Alternative for PM Mudra Loan

There are chances that you might not qualify for a loan through PMMY. In such cases, you can always apply for a gold loan. indiagold provides gold loans at just 0.77% monthly interest.

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