Mudra Loan Eligibility Criteria

The Pradhan Mantri Mudra Yojana (PMMY) was launched by the Prime Minister of India on April 8, 2015. An acronym for Micro Units Development and Refinance Agency (MUDRA), this is an institution set up by the government to fund the income-generating activities of micro and small enterprises in the non-farming, non-corporate sector. The Mudra loan scheme, offered as a part of the Pradhan Mantri Mudra Yojana, allows eligible enterprises to borrow funds as high as Rs. 10 Lakhs.

To know more details on availing a Mudra loan, checkout our mudra loan eligibility page.

Purpose of Mudra Loan

The Micro, Small and Medium Enterprises (MSMEs) have contributed significantly to the growing economy of India. In addition to that, MSMEs also play a crucial role in generating job opportunities across the nation. Keeping all these factors in mind, the Indian Government has established Micro-Units Development and Refinance Agency (MUDRA) to offer financial support to small businesses and startups in India.

MUDRA loan is approved and disbursed by public and private banks and NBFCs registered under this scheme. The primary benefit of this loan is that it is provided without any collateral. The capital obtained from a MUDRA loan scheme can be utilized to grow and expand businesses.

The table below displays the number of loans sanctioned under the PMMY scheme in the past few years.

Financial Year 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 No. of PMMY Loans Sanctioned: 3,48,80,924 3,97,01,047 4,81,30,593 5,98,70,318 5,83,65,823 Loan Amount Sanctioned: 1,37,449.27 Crore 1,80,528.54 Crore 2,53,677.10 Crore 321722.79 Crore 3,21,722.79 Crore Loan Amount Disbursed: 1,32,954.73 Crore 1,75,312.13 Crore 2,46,437.40 Crore 311811.38 Crore 3,11,811.38 Crore

Mudra Loan Interest Rates & Charges

The Pradhan Mantri Mudra Yojana (PMMY) scheme allows eligible MSME/ SME to borrow funds as high as Rs. 10 Lakhs. The interest rates on Mudra Loan vary from bank to bank and depend on the applicant’s profile and business requirements.

On Mudra loan, for an amount of up to Rs. 50,000/-, no processing fee is applicable.

10% of interest rate and processing fee of 0.50% (plus additional taxes) is applicable on the loan amount of Rs. 50,001/- to Rs. 10,00,000/-