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Pradhan Mantri MUDRA Yojana - Micro Loans

The complete 2026 guide to getting a collateral-free micro-loan under the PM MUDRA Yojana. Learn how to apply for Shishu, Kishore, and Tarun loans ranging from ₹50,000 up to ₹20 Lakhs to start or expand your small business without needing a guarantor.

Last Updated: 24 March 2026
Pradhan Mantri MUDRA Yojana - Micro Loans

Overview

The PM MUDRA Yojana provides financial support to small and micro-businesses that usually lack access to formal banking credit. The biggest advantage of this scheme is that no collateral or third-party guarantor is required. The loans are divided into three categories based on the growth stage and funding needs of the business: 🌱 Shishu: Loans up to ₹50,000 (Ideal for starting a new business). 🌿 Kishore: Loans from ₹50,001 to ₹5,00,000 (For buying equipment or initial expansion). 🌳 Tarun: Loans from ₹5,00,001 to ₹10,00,000 (For established businesses needing major expansion). ⭐ Tarun Plus (New Update): Loans up to ₹20,00,000 (Exclusively for entrepreneurs who have successfully availed and repaid previous Tarun loans). ✌️ Pro Tips for Instant Approval 📝 Register on Udyam: Having an MSME Udyam Registration Certificate significantly speeds up the approval process and proves your business is legitimate. 📊 Strong Project Report: For Kishore and Tarun loans, a clear, well-documented business plan or project report showing projected sales and expenses is the #1 secret to getting approved. 💳 Check Your CIBIL Score: While MUDRA is for small businesses, banks still check your personal credit score. A score above 700 almost guarantees a smooth process. ⏳ Processing Timeline ⏱️ Shishu Loans: Usually processed and disbursed within 7 to 10 working days. 📈 Kishore & Tarun Loans: Can take 15 to 30 working days depending on the bank's verification of your project report and business site. ❌ Common Rejection Reasons 📉 Applicant has a poor CIBIL score or is an existing defaulter on a previous loan. 🌾 Applying for pure agricultural/crop farming activities (which fall under KCC, not MUDRA). 📄 Vague or unrealistic business plan/project report (especially for loans above ₹5 Lakhs). 🏢 Asking for a corporate loan (MUDRA is strictly for sole proprietors, partnerships, and micro-enterprises).

Who is Eligible?

  • Min Age: 18 Years
  • Max Income: No upper income limit for the applicant.
  • Occupation: Any non-corporate, non-farm small/micro enterprise owner (e.g., Shopkeepers, Traders, Artisans, Freelancers, Transport Operators, Food Service owners). Note: Allied agricultural activities like dairy, poultry, and beekeeping are eligible, but pure crop farming is not.
  • Citizenship: Must be an Indian citizen.
  • Credit History: Must not be a defaulter to any bank or financial institution.

Documents Required

  • Aadhaar Card & PAN Card
  • Proof of Identity & Address (Voter ID, Passport, Driving License)
  • Proof of Business Entity (Udyam Registration, Shop & Establishment Certificate, Trade License)
  • Last 6 months' Bank Statement
  • Quotations for machinery/equipment to be purchased (if applicable)
  • Project Report/Business Plan (Mandatory for Kishore and Tarun loans)
  • 2 Passport Size Photographs

How to Apply

  1. 1Prepare Your Documents: Gather your KYC, business proofs, and draft a solid project report.
  2. 2Apply via JanSamarth Portal: Go to the official JanSamarth portal (jansamarth.in). This is the government's central portal for credit-linked schemes.
  3. 3Check Eligibility Online: Answer a few simple questions about your business on the portal to get matched with the MUDRA scheme.
  4. 4Fill the Digital Form: Register using your mobile number, fill out the detailed application form, and upload your digital documents.
  5. 5Get Bank Offers: The portal will show you loan offers from over 200+ connected lenders. Select the bank of your choice.
  6. 6Digital Approval & Bank Visit: You will receive an "In-Principle Approval" online. Visit the selected bank branch with your original documents for final verification and loan disbursement. (Alternatively, you can visit the Udyamimitra portal or directly walk into any commercial bank, RRB, or cooperative bank to apply offline).
  7. 7Fee Structure 2026 : Portal Registration (JanSamarth): FREE Processing Fee (Shishu): NIL (Banks are not allowed to charge processing fees for Shishu loans). Processing Fee (Kishore/Tarun): Depends on the internal guidelines of the lending bank (usually 0.5% to 1% of the loan amount).
  8. 8📍 Status Tracking: JanSamarth Portal → Login → Dashboard shows real-time progress of your loan application from submission to bank sanction.

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