Pradhan Mantri Mudra Yojana 2023, PMMY Scheme ( In Detailed)

Pradhan Mantri Mudra Yojana: Pradhan Mantri Mudra Yojana (PMMY), also known as Mudra Loan Yojana, is a government-backed scheme that provides collateral-free loans to micro and small enterprises (MSEs). The scheme was launched in 2015 by the Prime Minister of India, Narendra Modi. PMMY has been a very successful scheme, with over 140 million loans disbursed as of March 2023

In the above backdrop, the Micro Units Development & Refinance Agency Ltd (MUDRA) was set up by the Government of India (GoI). MUDRA has been initially formed as a wholly owned subsidiary of the Small Industries Development Bank of India (SIDBI) with 100% capital being contributed by it. MUDRA has been formed with the primary objective of developing the micro-enterprise sector in the country by extending various support including financial support in the form of refinance, so as to achieve the goal of “funding the unfunded”. The GOI Press release of 2 March 2015 has laid down the roles and responsibilities of MUDRA.

Pradhan Mantri Mudra Yojana (Pmmy). Find Various Queries related to Mudra Yojana, Recently we provide Details for Eligibility Criteria For Mudra Scheme Refinance/ Loan Now In this article you can find complete details regarding Mudra Yojana like – What is Mudra Yojana, How to Get Loan, What is the Interest rate under mudra yojana etc. Now you can scroll down below and check Complete details for Pradhan Mantri Mudra Yojana (Pmmy)

Pradhan Mantri Mudra Yojana (Pmmy)

What is MUDRA?

MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a new institution being set up by Government of India for development and refinancing activities relating to micro units. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide funding to the non corporate small business sector

Must Read – Pradhan Mantri Mudra Scheme (Pmmy) Details in Hindi

Why MUDRA has been set up?

The biggest bottleneck to the growth of entrepreneurship in the Non –Corporate Small Business Sector (NCSBS) is lack of financial support to this sector. Majority of this sector does not have access to formal sources of finance. GoI is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSBS segment or the informal sector for bringing them in the mainstream. To begin with, it is being set up as a subsidiary of SIDBI.

What will be roles and responsibilities of MUDRA?

MUDRA would be responsible for refinancing all Last Mile Financiers such as Non Banking Finance Companies of various types engaged in financing of small businesses, Societies, Trusts, Section 8 Companies [formerly Section 25], Co-operative Societies, Small Banks, Scheduled Commercial Banks and Regional Rural Banks which are in the business of lending to Micro / Small business entities engaged in manufacturing, trading and services activities. The Bank would partner with State / Regional level financial intermediaries to provide finance to Last Mile Financier of Small / Micro business enterprises.

What are the offerings of MUDRA? How will MUDRA function?

Under the aegis of Pradhan Mantri MUDRA Yojana, MUDRA has already created its initial products / schemes. The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to :

  • Shishu: This loan is for MSEs with a turnover of up to Rs. 50,000. The maximum loan amount under this category is Rs. 50,000.
  • Kishor: This loan is for MSEs with a turnover of Rs. 50,000 to Rs. 5 lakh. The maximum loan amount under this category is Rs. 5 lakh.
  • Tarun: This loan is for MSEs with a turnover of Rs. 5 lakh to Rs. 10 lakh. The maximum loan amount under this category is Rs. 10 lakh.

MUDRA will be operating as a refinancing institution through State / Regional level intermediaries. MUDRA’s delivery channel is conceived to be through the route of refinance primarily to NBFCs / MFIs, besides other intermediaries including Banks, Primary Lending Institutions etc.

At the same time, there is a need to develop and expand the delivery channel at the ground level. In this context, there is already in existence, a large number of ‘Last Mile Financiers’ in the form of companies, trusts, societies, associations and other networks which are providing informal finance to small businesses.


To be eligible for a Mudra loan, the applicant must meet the following criteria:

  • The applicant must be an Indian citizen.
  • The applicant must be a resident of India.
  • Have a valid PAN card
  • The applicant must have a valid business plan.
  • The applicant must have a minimum net worth of Rs. 25,000.

Must Read – Mudra Bank Yojana

Who are the target clients of MUDRA / What kind of borrowers are eligible for assistance from MUDRA?

Non –Corporate Small Business Segment (NCSBS) comprising of millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.

Are Regional Rural Banks (RRBs) eligible for assistance from MUDRA?

Yes, MUDRA will be extending refinance support to RRBs for enhancing their liquidity.

What is the rate of interest charged by MUDRA?

MUDRA will be a refinancing agency which will extend its funds to Last Mile Financiers to enable them to reach out to the sector. Access to finance in conjunction with rational price is going to be the unique customer value proposition of MUDRA. It will use a variety of innovative financing means to bring down the cost of funding for the ultimate borrower.

I have a small business dealing in paper goods. Can MUDRA help me?

Yes. MUDRA will offer smaller loans upto 50,000/ under the ‘Shishu’ category and beyond 50,000 and upto 5 lakh under the ‘Kishor’ category. These products have been designed to cater to customers operating at the lower end of the enterprise spectrum. The loans will be extended through MFIs, NBFCs, Banks etc.

I have graduated recently. I want to start my own business. Can MUDRA help me?

MUDRA offers smaller loans upto 50,000/ under the ‘Shishu’ category and beyond 50,000 and upto 5 lakh under the ‘Kishor’ category. It also offers loans beyond 5lakh and upto 10 lakh under the Tarun category. Depending on your nature of business project requirement you can access finance from one of the intermediaries of MUDRA as per the norms.

I have diploma in food processing technology. I want to start my own unit. Please guide me.

Food Processing is an eligible activity for coverage under one of the MUDRA schemes. You can avail assistance under MUDRA schemes as per your requirements.

I am an artisan specialising in Jari work. I want to start my own work instead of doing job work for others. Can MUDRA help me?

You can avail assistance under the ‘Shishu’ category of Micro Credit Scheme of MUDRA through any of the MFIs operating in your region for setting up your own enterprise.

I have done a course on fashion designing. I want to open my own boutique and develop my own brand. What help can MUDRA offer to me?

MUDRA operates a special scheme for women entrepreneurs; viz; Mahila Uddyami Scheme. Assistance will be provided under all three groups, viz. ‘Shishu’, ‘Kishor’ as well as ‘Tarun’.

I intend to work on franchisee model and open an ice cream parlour. Can MUDRA help me?

MUDRA operates a special scheme ‘Business loans for Traders and Shopkeepers’. You can avail the facilities under the scheme as per your requirements.

I want to expand my pottery business by adding more variety and designs. What help can I get from MUDRA?

You can avail assistance under the ‘Shishu’ category of Micro Credit Scheme of MUDRA through any of the MFIs operating in your region for setting up your own enterprise.

Scope of PMMY & various types of loan available and which are the agencies that will provide loan?

Pradhan Mantri Mudra Yojana (PMMY) will be extended by all Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions and Non Banking Finance Companies. All loans upto a loan size of 10 lakh provided for non farm sector income generating activities since April 08, 2015 is treated as PMMY.

Who will monitor the implementation of PMMY?

Monitoring of PMMY will be done at the State level through SLBC forum and at national level by MUDRA / Department of Financial Services, Govt. of India. For this purpose, MUDRA has developed a portal, wherein the banks and other lending institutions directly feed their achievement details which is consolidated by the system and reports are generated for review.

Is there any scheme in Central/State Govt., which is applicable all over India, in which loan without guarantee is granted / the guarantors identity is checked?

Pradhan Mantri MUDRA Yojana (PMMY) is a Govt. of India Scheme, which enables a small borrower to borrow from banks, MFIs, NBFCs for loans upto 10 lakh for non-farm income generating activities. Generally, loans upto 10 lakh issued by banks under Micro Small Enterprises is given without collaterals.

Are opening of a school, carpentry and RO water plant installation eligible for the loan, If So, what is the maximum and minimum amount of loan?

Carpentry, RO water plant installation, on a business mode, and educational institution are eligible activities under MUDRA loan, if the loan amount is below 10 lakh. The primary requirement for being a MUDRA loan is to be a income generating activity under manufacturing, processing, trading and service sector and the loan amount is below 10 lakh

What is the eligibility of persons for availing MUDRA loans?

Any Indian Citizen who has a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than 10 lakh can approach either a Bank, MFI, or NBFC for availing of MUDRA loans under Pradhan Mantri Mudra Yojana (PMMY). The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The lending rates are as per the RBI guidelines issued in this regard from time to time

Must Read – Eligibility Criteria For Mudra scheme Refinance/ Loan

Is there any subsidy under Pradhan Mantri Mudra Yojana (PMMY). If so details thereof?

There is no subsidy for the loan given under PMMY. However, if the loan proposal is linked some Government scheme, wherein the Government is providing capital subsidy, it will be eligible under PMMY also.

Kindly provide brief Profile of MUDRA.

MUDRA which stands for Micro Units Development and Refinance Agency Ltd. is a refinance agency and not a direct lending institution. MUDRA provides refinance support to its intermediaries viz. Banks / Micro Finance Institutions / Non Banking Finance Companies, who are in the business of lending for income generating activities in the non farm sector in manufacturing, trading and services sector and who in turn will finance the beneficiaries.

Can you provide information on MUDRA Card?

MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner It will provide a facility of working capital arrangement in the form of CC/OD to the borrower. Since MUDRA Card will be a RuPay Debit Card, it can be used for drawing cash from ATM or Business Correspondent or make purchase using Point of Sale machine. Facility is also there to repay the amount as and when surplus is available, thereby reducing the interest burden.

Is Khadi activity eligible under PMMY loans?

Yes. MUDRA loans are applicable for any activity which results in income generation. As Khadi is one of the eligible activities under Textile sector and in case MUDRA loans are taken for income generation, the same can be covered.

Are MUDRA loans available for purchase of CNG Tempo/Taxi?

MUDRA loans would be available for purchase of CNG Tempo/Taxi, in case the applicant intends to use the vehicle as public transport carrier.

Is it required to submit IT returns for the preceding 2 years for availing loan of 10 lakh under PMMY?

Generally, IT returns are not insisted for small value loans. However, the requirement of documents will be advised by the concerned lending institutions based on the policies framed.

Is handicapped persons also eligible for PMMY loans?

Any Indian Citizen, who is eligible to avail of loan and has a business plan for income generating activity can avail of MUDRA loan. The loan proposal should be for setting up of a new/upgrading an existing Micro business enterprises in the manufacturing, processing, trading and service sector.

Can you briefly explain the repayment terms, eligibility and action plan for the assistance availed from MUDRA?

The terms and conditions of the loan will be governed by the rules and regulations of the lending institution and the broad guidelines of RBI. The lending institution will be processing the loan request, based on the merits of the proposal only. The loan amount will be decided by the requirement of the proposed income-generating activity. The repayment terms will be governed by the cash flow of the enterprise and the eligibility of the borrower will be decided by the norms of lending institutions.

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