Friends, if you need a loan for a small business or micro enterprise, the Pradhan Mantri Mudra Yojana (PMMY) is a great option! This government scheme provides collateral-free loans of up to ₹10 lakh to non-farm small businesses in categories such as Shishu (up to ₹50,000), Kishore (up to ₹5 lakh), and Tarun (up to ₹10 lakh).
Loans are available from banks, NBFCs, or MFIs, and now applying online is easy. I’ve kept the steps simple so beginners like you can understand. Let’s see how to apply!
Eligibility: Who can apply?
First, check whether you’re eligible. This loan is for individuals, proprietorships, partnerships, or private companies engaged in non-farm activities such as manufacturing, trading, services, or food processing.
Crop loans are not for agriculture. Women, SC/ST, OBC, and minorities receive priority. Your business must generate income and not have any existing defaulted loans. You must be 18+ and an Indian citizen.
Documents: What will be required?
Documents are minimal, but keep them ready:
- Identity proof: Aadhaar, PAN, Voter ID, or Passport.
- Address proof: Same as above or utility bill.
- Business documents: Udyog Aadhaar, license, registration certificate, or deed copy.
- Photos: Latest passport size.
- Bank statements: Last 6 months.
- Proof of category: SC/ST/OBC certificate if applicable.
- Business plan: Equipment quotes or vendor details for loan purposes.
No collateral is required, but a personal guarantee is possible.
How to Apply for Mudra Loan Online: Step-by-Step Guide
- Go to the Portal: Open the official Udyamimitra portal (www.udyamimitra.in) or Jansamarth portal (www.jansamarth.in). Register for a Mudra loan here and check eligibility.
- Fill the Form: Enter personal details, business information, loan amount, and category (child/teen/youngster) in the application form. Briefly explain the business plan.
- Upload Documents: Scan and upload all required documents. Bank statements can be downloaded digitally through net banking.
- Select a Bank: Choose a nearby bank or NBFC like SBI, HDFC, Bank of Baroda, or PSB Loans in 59 Minutes portal. The application will be forwarded.
- Verification and Approval: The bank will verify documents and check your credit. After approval, the loan account will be opened and the funds will be transferred to your bank account. Digital approval can be obtained in as little as 59 minutes at some banks.
You can also go offline at a bank branch, but online is faster. Interest rates depend on the bank, usually around 8-12%, and repayment is up to 5 years.
| Features | Description |
|---|---|
| Loan Amount | Up to ₹10 Lakh (Shishu: ₹50k, Kishore: ₹5L, Tarun: ₹10L) |
| Eligibility | Non-farm micro/small enterprises, individuals, firms |
| Documents | ID/Address proof, business docs, bank statements |
| Interest Rate | Bank-wise (8-12% approx) |
| Repayment | Up to 5 years |
| Collateral | None required |
| Updates | Scheme ongoing since 2015 |
Pros and Cons
Pros:
- Collateral-free, easy for small businesses.
- Up to ₹10 lakh quick funding.
- Apply online via portals like Udyamimitra.
- Priority for women/minorities.
- No processing fees much.
Cons:
- Bank verification may take time.
- Business plan should be strong.
- Agriculture/crop loans not covered.
- Credit history check is done.
Conclusion
Mudra loans are a solid scheme for starting or expanding a small business – you can get money quickly by applying online. Start with Udyamimitra or Jansamarth, have your documents ready, and connect with a nearby bank.
If your business idea is ready, apply now! Let us know in the comments. What are your business plans? Check the official Mudra site or portals for the latest.
