The PM Mudra Yojana has been running since 2015, but the 2024-25 Union Budget brought one change worth noting: a new Tarun Plus category that lets entrepreneurs who have fully repaid a Tarun loan now borrow up to Rs 20 lakh without any collateral. That is the biggest update to the scheme in years.
For everyone else, the existing categories still apply and are still collateral-free. Here is how the PM Mudra Yojana 2026 loan structure works.
Four loan categories under PM Mudra Yojana 2026
| Category | Loan amount | Best for |
|---|---|---|
| Shishu | Up to Rs 50,000 | New businesses just starting out |
| Kishore | Rs 50,001 to Rs 5 lakh | Businesses that are running but need working capital |
| Tarun | Rs 5 lakh to Rs 10 lakh | Established businesses planning expansion |
| Tarun Plus (new) | Rs 10 lakh to Rs 20 lakh | Entrepreneurs who have fully repaid a previous Tarun loan |
None of these categories require collateral or a third-party guarantee. The Credit Guarantee Fund for Micro Units (CGFMU) backs them, so banks take less risk and approval rates are higher than personal loans.
Who can apply
- Indian citizen aged 18 to 65
- Running or planning to start a non-farm business in manufacturing, trading, or services
- Total credit requirement should not go above Rs 20 lakh
- No history of loan default with any bank
Women entrepreneurs, SC/ST applicants, and rural businesses get priority. If you are a woman running a home-based business, a Shishu or Kishore loan under PM Mudra Yojana 2026 is one of the more accessible options in the country right now.
What is the interest rate?
MUDRA does not set a fixed rate. Each lender decides based on your profile and the loan amount. Public sector banks typically charge between 8.5% and 12% per year. Women borrowers often get a 0.25% concession at government banks. Private banks and MFIs can charge slightly higher rates depending on your credit history.
How to apply online
- Visit Udyamimitra Portal or Jan Samarth Portal
- Register with your mobile number and Aadhaar
- Fill the application with business details, turnover, and loan amount needed
- Upload: Aadhaar, PAN, business registration proof, 6 months bank statements
- Submit and track the application status online
- The bank will contact you for verification and sanction
You can also walk into any public sector bank and ask for the PMMY form. Shishu loans typically get approved within 7 working days. Kishore and Tarun loans take 15 to 30 days.
Banks that give MUDRA loans
You do not need to find a specific MUDRA bank. Any of these work:
- Public sector banks: SBI, Bank of Baroda, PNB, Canara Bank, Union Bank
- Private banks: HDFC, ICICI, Axis, Kotak Mahindra
- Regional Rural Banks
- Small Finance Banks: Equitas, Ujjivan, Jana SFB
- MFIs and NBFCs
Documents you will need
- Aadhaar card
- PAN card
- Business registration proof (GST certificate, Udyam registration, or shop licence)
- Last 6 months bank statements
- Two passport-size photographs
- Business address proof
- Equipment quotation if applying for a term loan
Important links
| Resource | Link |
|---|---|
| Apply online (Udyamimitra) | udyamimitra.in |
| Jan Samarth portal | jansamarth.in |
| Official MUDRA website | mudra.org.in |
| Udyam registration | udyamregistration.gov.in |
Common questions
Is a MUDRA loan interest-free?
No. MUDRA loans are collateral-free, not interest-free. You still pay interest, but you do not need to pledge any asset as security. The rate depends on your lender and credit profile.
How long does approval take?
Shishu category loans get done in about 7 working days at most public sector banks. Kishore and Tarun loans take 15 to 30 days depending on documentation and your business history.
Do I need GST registration to apply?
No. For businesses below the GST threshold, a shop licence, Udyam registration, or trade licence works as proof. GST is not a requirement for MUDRA loan eligibility.
Last updated: 16.06.2026
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