MUDRA Loan 2026: Shishu, Kishore, Tarun and Tarun Plus Eligibility
The Pradhan Mantri MUDRA Yojana (PMMY) is a Government of India scheme that facilitates credit for income-generating micro and small enterprises in the non-farm sector. Eligible activities include manufacturing, trading, services and certain activities allied to agriculture, such as poultry, dairy and beekeeping [1].
MUDRA loans are delivered by eligible lending institutions, including banks, microfinance institutions, NBFCs, small finance banks and other approved financial intermediaries. The scheme is divided into four categories: Shishu up to ₹50,000, Kishore above ₹50,000 up to ₹5 lakh, Tarun above ₹5 lakh up to ₹10 lakh, and Tarun Plus above ₹10 lakh up to ₹20 lakh for entrepreneurs who have successfully repaid a previous Tarun loan [1] [2].
MUDRA is a loan programme, not a subsidy scheme. The lender decides the applicable interest rate, repayment terms, security requirements and sanction amount according to its policy and applicable regulatory guidance. Applicants should therefore compare the official scheme category with the actual sanction terms offered by the lender.
Direct answer: A MUDRA loan under PMMY can range from up to ₹50,000 in Shishu to up to ₹20 lakh in Tarun Plus. Tarun Plus is specifically for entrepreneurs who have successfully repaid a previous Tarun-category loan. There is no universal PMMY application deadline verified in the official sources reviewed, and PMMY does not provide a subsidy on the loan [1] [2].
MUDRA loan details at a glance
| Field | Verified PMMY information |
|---|---|
| Opportunity name | Pradhan Mantri MUDRA Yojana (PMMY) |
| Provider | Government of India; Ministry of Finance / Department of Financial Services information is published on JanSamarth |
| Country | India |
| Funding type | Business loan: term loan, overdraft, working capital or composite loan, depending on lender [2] |
| Shishu | Up to ₹50,000 [1] |
| Kishore | Above ₹50,000 and up to ₹5 lakh [1] |
| Tarun | Above ₹5 lakh and up to ₹10 lakh [1] |
| Tarun Plus | Above ₹10 lakh and up to ₹20 lakh for successful previous Tarun-loan repayment [1] [2] |
| Eligible sectors | Non-farm income-generating manufacturing, trading and services; some activities allied to agriculture [1] |
| Eligible borrowers | Individuals, proprietorships, partnerships, private companies, public companies and other legal forms, subject to lender assessment [1] |
| Lenders | Banks, MFIs, NBFCs, small finance banks and other eligible member lending institutions [1] |
| Subsidy | No PMMY subsidy is stated on the JanSamarth FAQ [2] |
| Interest rate | Set by the lending institution under its policy and applicable RBI guidance [1] [2] |
| Universal deadline | None verified in the official sources reviewed |
| Official application routes | JanSamarth PMMY page and eligible lenders; the UMANG page also describes the online route [1] [2] |
What is a MUDRA loan?
MUDRA stands for Micro Units Development and Refinance Agency. The PMMY framework supports credit access for non-corporate, non-farm small and micro enterprises. The official UMANG information identifies examples such as small manufacturing units, shopkeepers, vendors, food-service units, repair shops, artisans, food processors and other income-generating micro businesses [1].
The underlying loan is provided by a member lending institution rather than being paid directly by MUDRA to every entrepreneur. The official MUDRA procedure page describes MUDRA’s broader refinance and delivery architecture through banks, NBFCs, MFIs and other intermediaries [3]. For an applicant, this means the practical loan relationship is with the selected bank, NBFC, MFI or other eligible lender.
PMMY can finance working capital, equipment, business expansion or other eligible income-generating needs, depending on the lender’s product and appraisal. The borrower remains responsible for using the funds for the approved business purpose and repaying the loan according to the sanction terms.
MUDRA loan categories explained
Shishu: up to ₹50,000
Shishu is intended for the smallest funding requirement, up to ₹50,000. It may be relevant to a very early-stage micro business or a small working-capital or equipment requirement, but the applicant still needs to satisfy the lender’s eligibility and documentation requirements [1].
The UMANG page says that processing charges for Shishu loans are waived by most banks, while also noting that banks may charge fees under their internal guidelines. Applicants should confirm the actual fee, if any, before accepting a sanction [1].
Kishore: above ₹50,000 up to ₹5 lakh
Kishore covers loans above ₹50,000 and up to ₹5 lakh. It may suit a small business that has moved beyond the smallest initial requirement and needs a larger working-capital or asset-finance facility. The lender will assess the activity, cash flow, credit history, documents and proposed use of funds.
Tarun: above ₹5 lakh up to ₹10 lakh
Tarun covers loans above ₹5 lakh and up to ₹10 lakh. Applicants should be prepared for a more detailed business and financial assessment as the requested amount increases. Depending on the lender and the proposal, the institution may request a project report, financial statements, tax records, bank statements and projected financials [1].
Tarun Plus: above ₹10 lakh up to ₹20 lakh
Tarun Plus covers loans above ₹10 lakh and up to ₹20 lakh for entrepreneurs who have availed and successfully repaid a previous Tarun-category loan [1] [2]. It is not simply a larger first-time MUDRA loan. An applicant seeking Tarun Plus should retain evidence of the earlier Tarun facility and its repayment history and should confirm the lender’s interpretation of successful repayment.
Who is eligible for PMMY?
The official PMMY information lists individuals, proprietorship concerns, partnership firms, private limited companies, public companies and other legal forms as eligible borrower types, subject to the scheme and lender requirements [1] [2]. The business must generally be an income-generating micro or small enterprise in an eligible non-farm activity.
The applicant should not be a defaulter to a bank or financial institution and should have a satisfactory credit track record, according to the official UMANG and JanSamarth information [1] [2]. An individual borrower may also need the skills, experience or knowledge required for the proposed activity. Educational qualification, if relevant, is assessed based on the nature of the activity rather than a single universal qualification rule [1].
Eligible activities include manufacturing, trading and services, along with specified activities allied to agriculture. The exact activity classification, permitted expenditure and documentation depend on the lender and current PMMY instructions. Do not assume that an activity qualifies merely because it is described as a “small business.”
Does MUDRA provide a subsidy?
No. The JanSamarth PMMY page states in its FAQ that there is no subsidy for the loan given under PMMY [2]. This is a key distinction between MUDRA and PMEGP. FundRight’s PMEGP guide covers a separate credit-linked subsidy programme with different eligibility and project-cost rules.
MUDRA may improve access to institutional credit, but it does not mean that the borrower receives free money or that interest is waived. The interest rate is determined by the lender under its policy, and the borrower must follow the repayment schedule in the sanction documents [1] [2].
Is a MUDRA loan collateral-free?
Applicants should avoid a blanket statement that every MUDRA loan is collateral-free. The JanSamarth page references RBI guidance that banks should not insist on collateral security for loans up to ₹10 lakh extended to units in the micro and small enterprise sector [2]. However, the lender’s documentation, primary charge over assets created from the loan, credit assessment and other applicable conditions still matter.
The same JanSamarth page states that the first charge may be taken on assets created from the loan and assets directly associated with the business or project [2]. Ask the lender to explain the security, guarantee, margin, insurance and documentation terms in writing. A scheme label does not guarantee sanction or eliminate every lender condition.
How to apply for a MUDRA loan online
Step 1: Define the funding requirement
Decide whether the requirement is working capital, equipment, business expansion, a term loan, an overdraft or a composite facility. Request only an amount that can be supported by the business cash flow and the proposed use of funds.
Step 2: Select the correct category
Use the PMMY bands to identify the likely category: Shishu, Kishore, Tarun or Tarun Plus. If you are applying for Tarun Plus, confirm that you previously received and successfully repaid a Tarun-category loan [1] [2]. The final category and sanction remain subject to the lender’s appraisal.
Step 3: Prepare the business information
Prepare a concise business description, ownership details, activity classification, expected sales, costs, existing credit facilities, proposed credit facility and repayment plan. For larger applications, prepare a project report and projected financials. The UMANG page lists project reports and additional financial records among the documents that may apply for Kishore, Tarun and Tarun Plus cases [1].
Step 4: Use an official channel
The JanSamarth PMMY page provides an online eligibility and application route [2]. The UMANG page describes selecting the Udyamimitra route, choosing “Mudra loan,” selecting new entrepreneur, existing entrepreneur or self-employed professional, generating an OTP and completing the application [1]. Borrowers may also approach a nearby eligible bank, MFI, NBFC or small finance bank.
Step 5: Submit identity and business documents
The UMANG page lists identity proof, address proof, a recent photograph, signature, proof of identity or address of the business enterprise and, depending on the category and amount, bank statements, balance sheets, tax returns, projected balance sheets and a project report [1]. The lender may request additional documents under its internal policy.
Step 6: Retain the application number and lender communications
The online process described by UMANG generates an application number after submission [1]. Save it with the acknowledgement, documents, lender messages, sanction letter and repayment schedule. Do not pay an unofficial agent for a promised approval: the UMANG page expressly warns that MUDRA does not engage agents or middlemen to obtain PMMY loans [1].
Step 7: Review the sanction before accepting
Before accepting the loan, check the sanctioned amount, interest rate, processing charges, repayment period, moratorium if any, instalment schedule, security or primary charge, insurance, permitted use of funds and consequences of delayed repayment. These terms are lender-specific and are not guaranteed by the PMMY category name.
MUDRA compared with other FundRight funding routes
| Funding need | Better starting point | Why it differs |
|---|---|---|
| Small non-farm business loan | PMMY/MUDRA | Four loan categories from Shishu to Tarun Plus |
| New micro-enterprise plus subsidy | PMEGP guide | Bank loan linked to margin-money subsidy and new-project rules |
| Credit guarantee for eligible MSE borrowing | CGTMSE guide | Guarantee mechanism supporting lender finance; not a direct borrower grant |
| DPIIT-recognised startup seed support | SISFS guide | Startup-seed funding route with different eligibility and instruments |
| Compare multiple verified opportunities | FundRight directory | Discovery across grants, funds, subsidies and loans |
FundRight’s eligibility checker can help organise your stage, sector, company type and state. Use the funds tracker to record the lender, category, documents, application number, status and repayment milestones. These FundRight tools do not replace the official lender, JanSamarth or PMMY information.
Frequently asked questions
What is the maximum MUDRA loan amount in 2026?
The current official PMMY information lists Tarun Plus loans above ₹10 lakh and up to ₹20 lakh for entrepreneurs who have successfully repaid a previous Tarun-category loan [1] [2]. The maximum is a category ceiling, not an automatic sanction.
What are the four MUDRA loan categories?
Shishu covers loans up to ₹50,000, Kishore covers loans above ₹50,000 up to ₹5 lakh, Tarun covers loans above ₹5 lakh up to ₹10 lakh, and Tarun Plus covers loans above ₹10 lakh up to ₹20 lakh for successful previous Tarun-loan borrowers [1] [2].
Can a first-time borrower apply for Tarun Plus?
The official JanSamarth and UMANG descriptions tie Tarun Plus to successful repayment of a previous Tarun-category loan [1] [2]. A first-time borrower should review Shishu, Kishore or Tarun based on the funding requirement and confirm the lender’s current policy.
Is there a MUDRA loan subsidy?
No. JanSamarth’s PMMY FAQ states that there is no subsidy for the loan under PMMY [2]. MUDRA is a loan programme, so repayment and interest obligations apply.
What is the MUDRA loan interest rate?
The official UMANG information says interest rates are declared by member lending institutions from time to time under applicable RBI guidance [1]. The rate is therefore lender-specific; applicants should not rely on an unsupported universal percentage.
Can a woman entrepreneur apply for a MUDRA loan?
Women may apply if they meet the applicable borrower, business and lender requirements. PMMY eligibility is based on the applicant and income-generating activity, not a claim that every woman applicant receives automatic approval or a special rate [1] [2].
What documents are required?
Commonly listed documents include identity and address proof, photograph, signature, business identity or address proof and, for larger cases, bank statements, financial statements, tax records, projected financials and a project report [1]. The lender may request more.
Is there a universal MUDRA application deadline?
No universal deadline was verified in the official sources reviewed. PMMY applications are made through eligible lenders and official online channels, but applicants should check current portal and lender instructions.
Does MUDRA lend directly to entrepreneurs?
The MUDRA procedure describes a refinance and intermediary delivery architecture. In practice, the borrower applies through an eligible lending institution such as a bank, MFI, NBFC or small finance bank [1] [3].
Conclusion
MUDRA is a practical starting point for an eligible micro or small enterprise seeking institutional business credit. Its four categories make the headline structure easy to understand: Shishu up to ₹50,000, Kishore up to ₹5 lakh, Tarun up to ₹10 lakh and Tarun Plus up to ₹20 lakh for eligible entrepreneurs with successful prior Tarun-loan repayment [1] [2].
The important qualifications are equally clear. PMMY is not a subsidy, the lender decides the final terms, Tarun Plus is not a first-time category, and a scheme label does not guarantee approval. Before applying, define the use of funds, prepare accurate business information, use an official channel, avoid unauthorised agents and review the sanction letter carefully.
For broader discovery, compare MUDRA with PMEGP, CGTMSE and startup-grant routes through the FundRight directory. Organise your application through the eligibility checker and funds tracker, and always confirm current terms with the official portal and selected lender.