Scheme Primer
Skill Development
ngo-practitioners
PM MUDRA Yojana — Collateral-Free Business Credit for 52 Crore Micro-Entrepreneurs
Last verified: May 2026 · 6 min read · JaBaSu Knowledge Commons
At a Glance
| Parameter |
Detail |
| Full Name |
Pradhan Mantri MUDRA Yojana (PMMY) |
| Launched |
8 April 2015 |
| Nodal Ministry |
Ministry of Finance (Dept. of Financial Services) |
| Implementing Agency |
MUDRA (Micro Units Development and Refinance Agency); lending through Banks, NBFCs, MFIs |
| Status |
Active — completed 10 years April 2025 |
| Cumulative loans (10 years) |
52 crore loan accounts |
| Women beneficiaries |
68-69% of all MUDRA beneficiaries nationally |
| SC/ST/OBC beneficiaries |
51% of MUDRA loan accounts |
| FY25 loans sanctioned |
4.79 crore loans totalling Rs. 5,02,782 crore |
| FY25 disbursed |
Rs. 4,91,787 crore |
| NPA rate (FY24) |
2.1% (down from 3.61% in FY21) |
| Budget 2025-26 allocation |
Rs. 6,050 crore |
| Official portal |
mudra.org.in |
Who Is Eligible?
Who should NOT apply for MUDRA (important for NGOs)
- Farm income activities (agricultural credit is through Kisan Credit Card and NABARD products)
- Registered private or public limited companies (MSME credit schemes apply)
- Existing MUDRA borrowers with active default on previous loans
- PM Vishwakarma borrowers within the scheme's 5-year window (they have a separate credit facility)
The Four Loan Categories
| Category |
Loan Range |
Target Enterprise Stage |
| Shishu |
Up to Rs. 50,000 |
Starting stage — seed capital for micro-enterprise |
| Kishor |
Rs. 50,001 to Rs. 5 lakh |
Early growth stage — expanding an existing enterprise |
| Tarun |
Rs. 5,00,001 to Rs. 10 lakh |
Established enterprise seeking growth capital |
| Tarun Plus |
Rs. 10,00,001 to Rs. 20 lakh |
Successful Tarun repayers scaling further (from Oct 2024) |
Tarun Plus is the newest and most significant change — introduced in the Union Budget 2024-25 and effective from 24 October 2024. It enables entrepreneurs who have repaid previous Tarun category loans to access Rs. 10-20 lakh without collateral. This single addition transforms MUDRA from a micro-enterprise scheme to a small-enterprise scheme — the loan quantum sufficient for equipment purchase, inventory build-up, and business formalisation.
What Is MUDRA?
Pradhan Mantri MUDRA Yojana is India's largest programme for financial inclusion of micro and small businesses. It provides collateral-free credit to non-corporate, non-farm micro-enterprises through a national network of banks, regional rural banks, small finance banks, NBFCs, and microfinance institutions (MFIs).
The "non-corporate, non-farm" eligibility is the defining parameter: MUDRA is for the textile vendor, the beauty parlour, the roadside food stall, the plumber, the cycle repairman, the carpenter, the small manufacturer — not for farmers (who have PM-KISAN and agricultural credit schemes) and not for registered companies (who have formal MSME credit).
MUDRA loans are deployed through any bank or NBFC that is a Member Lending Institution (MLI) — no separate application portal or dedicated MUDRA office. A borrower goes to their nearest bank, cooperative, or MFI and applies for a Mudra loan under the relevant category.
The 10-year milestone (April 2025): In its first decade, PMMY has facilitated over 52 crore loan accounts — making it the largest financial inclusion credit programme in Indian history. 68% of borrowers are women. 51% belong to SC/ST/OBC communities. The NPA rate has fallen from 3.61% in FY21 to 2.1% in FY24, indicating improving credit discipline among borrowers.
How to Apply
MUDRA has no single application portal — it works through the existing banking network:
At a bank: Visit any scheduled commercial bank, regional rural bank, or small finance bank with: Aadhaar, PAN card (or form 60 for those without PAN), passport photo, address proof, and basic business details (what the business is, where it operates, what the loan will be used for).
At an MFI or NBFC: For Shishu loans (up to Rs. 50,000), MFIs and NBFCs are often the most accessible channel — they operate at block and panchayat level, have lower documentation thresholds, and are more comfortable with first-generation borrowers.
At PMJDY (Jan Dhan) banks: A Jan Dhan account holder can access a Shishu Mudra loan at many banks — the Jan Dhan account history serves as the basic credit reference.
Documentation required (minimal for Shishu):
- Aadhaar / voter ID
- Address proof
- Business identity proof (trade licence, Udyam registration if available, or self-declaration)
- Passport photographs
- Bank account details
For Tarun and Tarun Plus: additional financial statements (bank statements for 6-12 months, ITR if applicable) and a basic business plan.
What NGOs Need to Know — the Practical Reality
1
Shishu loans are the entry point — and the most important for NGO communities. The Rs. 50,000 Shishu loan is the most relevant for tribal women running small food businesses, artisans expanding their workshop, or rural youth starting a service enterprise. At the national scale, Shishu accounts for the vast majority of MUDRA loans by count — and the majority of women borrowers are in Shishu. NGOs can specifically facilitate Shishu access as an economic inclusion activity.
2
The PM SVANidhi exclusion creates an important sequencing question. Artisans who have accessed PM SVANidhi (street vendor loans) or PM Vishwakarma credit are excluded from MUDRA for 5 years. NGOs helping informal entrepreneurs access credit must track which scheme the person has accessed and guide accordingly — SVANidhi for street vendors, Vishwakarma for the 18 trades, and MUDRA for everything else.
3
Women's access is strong in data — but quality matters. The 68% female borrower figure is nationally documented, but it includes a significant proportion of SHG-linked borrowers where the loan is nominally in a woman's name but managed collectively or by a male family member. NGOs supporting genuine women's enterprise should focus on direct individual MUDRA access — specifically through MFIs that work with women's individual enterprises rather than only SHG-linked products.
4
The Tarun Plus category opens a new scale of enterprise support. Rs. 10-20 lakh without collateral is, for the first time, a business-transforming quantum for small entrepreneurs — sufficient to purchase production equipment, lease a commercial space, or hire employees. NGOs supporting artisan clusters, food processing units, or service enterprises can now envision MUDRA as the capital for genuine enterprise growth, not just subsistence working capital.
5
Udyam registration unlocks additional benefits. Micro and small enterprises registered under Udyam (udyamregistration.gov.in) access priority sector lending from banks, easier collateral-free MUDRA credit, and MSME government procurement preferences. NGOs supporting MUDRA borrowers can simultaneously facilitate Udyam registration — a simple online process that costs nothing and opens multiple programme access doors.
How JaBaSu Helps NGOs Connect Their Communities
Enterprise assessment and scheme mapping
JaBaSu helps NGO partner communities identify which entrepreneurs are best suited for MUDRA (vs. PM SVANidhi, PM Vishwakarma, or SHG credit) based on their business type, credit history, and enterprise stage — preventing scheme misapplication and loan application rejection.
MFI linkage
JaBaSu maintains relationships with MFIs operating in Odisha's tribal and rural districts — facilitating community-level access to Shishu and Kishor MUDRA products through MFI field staff who come to the community rather than requiring the borrower to travel to a bank.
Udyam registration facilitation
JaBaSu's back-office support covers Udyam registration for micro and small enterprises in NGO partner communities — at no cost, through the Jan Seva Kendra or directly online.
Tarun Plus business planning
For enterprises at the Tarun Plus scale, JaBaSu provides basic financial planning support — cash flow projection, loan utilisation planning, and repayment scheduling — so that borrowers can both qualify for the loan and use it productively.