May 18, 2024
Pradhan Mantri Mudra Yojana
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Pradhan Mantri Mudra Yojana (PMMY): In recent years, entrepreneurship has gained significant momentum in India. With a vision to support and encourage small and medium-sized businesses, the government introduced the PMMY Yojana. Launched on April 8, 2015, by the Government of India, PMMY is an ambitious scheme aimed at providing financial assistance to aspiring entrepreneurs.

The Pradhan Mantri Mudra Yojana (PMMY) stands as a flagship scheme of the Government of India, aiming to empower micro-enterprises and boost economic growth. This initiative enables income-generating micro-enterprises in the non-farm sector, encompassing manufacturing, processing, trading, and service activities, to access micro-credit or loans of up to Rs. 10 lacks.

MUDRA, under this scheme, collaborates with Financial Intermediaries to facilitate loans for micro and small entities engaged in non-corporate, non-farm income-generating ventures. These entities comprise a vast array of small businesses, including proprietorship and partnership firms operating in various sectors such as manufacturing units, service providers, shopkeepers, fruit/vegetable vendors, truck operators, food-service units, repair shops, machine operators, artisans, food processors, and more, both in rural and urban areas.

It is worth noting that loans under the MUDRA Loan scheme can only be availed through banks and lending institutions, which include Public Sector Banks, Private Sector Banks, State-operated cooperative banks, Rural banks from the regional sector, Microfinance institutions, and other non-bank financial companies.

In essence, the PMMY strives to empower and support the backbone of India’s economy, the diverse and dynamic micro and small businesses, by providing them with the necessary financial assistance to thrive and contribute to the nation’s growth and development.

This article delves into the intricacies of the Pradhan Mantri Mudra Yojana, its objectives, and the impact it has made on the Indian economy.

Understanding the Pradhan Mantri Mudra Yojana (Mudra Loan)

The Pradhan Mantri Mudra Yojana, commonly referred to as PMMY Yojana, is a flagship scheme introduced to foster the growth of micro and small enterprises. The primary focus of the Mudra loan program is to extend financial support to the “missing middle” – the section of entrepreneurs who often find it challenging to access credit from traditional banking channels.

Pradhan Mantri Mudra Yojana

The Objectives of PMMY

PMMY operates with three primary objectives.

1. Promoting Entrepreneurship

The scheme aims to promote entrepreneurship at the grassroots level by encouraging individuals to turn their innovative ideas into viable business ventures. It seeks to create a conducive environment where aspiring entrepreneurs can access financial resources to fuel their dreams.

2. Financial Inclusion

PMMY emphasizes financial inclusion by providing financial assistance to entrepreneurs from marginalized communities and economically weaker sections. By extending credit to these underserved populations, the scheme aims to uplift them and create more opportunities for growth.

3. Boosting the Economy

One of the core objectives of PMMY is to stimulate economic growth by empowering small businesses. These enterprises play a crucial role in generating employment opportunities and contributing to the overall development of the nation.

The Three Stages of PMMY

The benefits under the scheme have been classified under three categories as ‘SHISHU’, ‘KISHOR’, and ‘TARUN’ to signify the stage of growth/development and funding needs of the beneficiary micro unit/entrepreneur. PMMY operates through three stages, each catering to different stages of entrepreneurial growth:

1. Shishu

The first stage, known as “Shishu,” focuses on providing financial support to entrepreneurs who are in the initial stages of setting up their businesses. Under this stage, applicants can avail themselves of loans up to Rs. 50,000/- to kickstart their ventures.

2. Kishor

The “Kishor” stage targets entrepreneurs who have already established their businesses but need additional funds to expand their operations. It offers higher loan amounts compared to the Shishu stage. This stage covers loans from Rs. 50,001 to Rs. 5,00,000/-

3. Tarun

The final stage, “Tarun,” is designed for well-established businesses that require substantial financial assistance for further growth and diversification. This stage covers loans from Rs. 5,00,001 to Rs. 10,00,000/-

How to Avail the Benefits of PMMY

To take advantage of the Pradhan Mantri Mudra Yojana, aspiring entrepreneurs need to follow a few simple steps:

  1. Documentation: Prepare all the necessary documents required for the loan application. These may include identity proof, address proof, and business-related documents.
  2. Visit a Financial Institution: Approach a participating financial institution such as banks, cooperative societies, or microfinance institutions.
  3. Select the Loan Category: Choose the appropriate loan category based on your business needs – Shishu, Kishor, or Tarun.
  4. Submit the Application: Complete the loan application process by submitting the required documents and providing the necessary details.
  5. Loan Disbursement: Once the application is approved, the loan amount will be disbursed to the applicant’s bank account.

Eligibility Of The Scheme

The following Eligible borrower categories are:

  1. Individuals
  2. Proprietary concern.
  3. Partnership Firm.
  4. Private Ltd. Company.
  5. Public Company.
  6. Any other legal forms.

The applicant should not be a defaulter to any bank or financial institution and should have a satisfactory credit track record. The individual borrowers may be required to possess the necessary skills/experience/ knowledge to undertake the proposed activity. The need for educational qualification, if any, needs to be assessed based on the nature of the proposed activity, and its requirement.

Documents Required For PMMY Yojana

Sishu Loan Document List

  1. Proof of identity – Self-attested copy of Voter’s ID Card / Driving Licence / PAN Card / Aadhaar Card / Passport / Photo Ids issued by Govt. authority etc.
  2. Proof of Residence: Recent telephone bill/electricity bill/property tax receipt (not older than 2 months) / Voter’s ID Card / Aadhar Card / Passport of Individual / Proprietor / Partners Bank passbook or latest account statement duly attested by Bank Officials / Domicile Certificate / Certificate issued by Govt. Authority / Local Panchayat / Municipality etc.
  3. Applicant’s recent Photograph (2 copies) not older than 6 months.
  4. Quotation of Machinery / other items to be purchased.
  5. Name of Supplier/details of machinery/price of machinery and/or items to be purchased.
  6. Proof of Identity / Address of the Business Enterprise – Copies of relevant Licences / Registration Certificates / Other Documents pertaining to the ownership, identity of the address of the business unit, if any
  7. Proof of category like SC / ST / OBC / Minority etc.

Kishore and Tarun Loan Document List

  1. Proof of identity – Self-certified copy of Voter’s ID card / Driving License / PAN Card / Aadhar Card/Passport.
  2. Proof of Residence – Recent telephone bill, electricity bill, property tax receipt (not older than 2 months), Voter’s ID card, Aadhar Card & Passport of Proprietor/Partners/Directors.
  3. Proof of SC/ST/OBC/Minority.
  4. Proof of Identity/Address of the Business Enterprise -Copies of relevant licenses/registration certificates/other documents pertaining to the ownership, identity, and address of the business unit.
  5. Applicant should not be a defaulter in any Bank/Financial institution.
  6. Statement of accounts (for the last six months), from the existing banker, if any.
  7. Last two years’ balance sheets of the units along with income tax/sales tax return etc. (Applicable for all cases from Rs.2 Lacs and above).
  8. Projected balance sheets for one year in case of working capital limits and for the period of the loan in case of term loan (Applicable for all cases from Rs.2 Lacs and above).
  9. Sales achieved during the current financial year up to the date of submission of application.
  10. Project report (for the proposed project) containing details of technical & economic viability.
  11. Memorandum and articles of association of the company/Partnership Deed of Partners etc.
  12. In the absence of a third-party guarantee, Asset & Liability statement from the borrower including Directors & Partners may be sought to know the net worth.

Mudra Loan Online Application Process

  • Following are the prerequisites for the enrollment process:
  1. ID Proof
  2. Address Proof
  3. Passport size photograph
  4. Applicant Signature
  5. Proof of Identity / Address of Business Enterprises
  • Go to PM MUDRA official website ( that we select the Udyamitra portal –
  • Click on Mudra loan “Apply Now”
  • Select one of the following: New entrepreneur/ Existing Entrepreneur/Self-employed professional
  • Then, Fill in the name of the applicant, email, and Mobile number and Generate OTP

After Successful Online Application Registration

  • Fill in Personal Details and Professional Details
  • Select hand-holding agencies if any help is Required for preparing project proposals etc. Otherwise, click “Loan Application Center” and apply now.
  • Select the category of loan required – Mudra Sishu / Mudra Kishore/ Mudra Tarun etc.
  • The applicant then needs to fill in the Business Information like business name, Business Activity, etc., and select Industry types like Manufacturing, service, Trading, or Agricultural allies.
  • Fill in Other Information like Fill the director Details, Banking/ Credit facilities Existing, Credit facilities Proposed, Future estimates, and Preferred Lander
  • Attached are all required Documents: ID proof, address proof, Applicant photo, Applicant Signature, Proof of Identity/ Address of Business Enterprise, etc.
  • Once the application for is submitted an Application Number gets generated which needs to be kept for Future Reference.

Success Stories and Impact of PMMY Yojana

Over the years, the Pradhan Mantri Mudra Yojana has witnessed numerous success stories of entrepreneurs who have transformed their lives and communities through their ventures. By providing access to credit and financial resources, the scheme has empowered individuals from diverse backgrounds to become self-reliant and contribute to the nation’s economic growth.


The Pradhan Mantri Mudra Yojana has emerged as a game-changer in India’s entrepreneurial landscape. By supporting micro and small enterprises, the scheme has paved the way for inclusive growth and prosperity. It has not only encouraged entrepreneurship but also strengthened financial inclusion, thereby fostering an environment of self-sufficiency and economic progress. With the continued support of such initiatives, India is poised to witness a surge in innovative businesses and a brighter, more prosperous future.


Who is eligible to apply for the Pradhan Mantri Mudra Yojana?

Any individual, sole proprietorship, partnership firm, or private or public limited company engaged in non-farm income-generating activities is eligible to apply for PMMY.

What is the maximum loan amount available under PMMY?

The maximum loan amount varies depending on the stage – Shishu, Kishor, or Tarun. For Shishu, it is up to Rs. 50,000, for Kishor, up to Rs. 5 lakhs, and for Tarun, up to Rs. 10 lakhs.

Can women entrepreneurs apply for loans under PMMY?

Yes, PMMY encourages and prioritizes applications from women entrepreneurs to promote woman empowerment and financial inclusion.

Is there any collateral required for PMMY loans?

No, loans under PMMY are collateral-free, making it easier for aspiring entrepreneurs to access credit.

How can I check the status of my PMMY loan application?

Applicants can check the status of their loan application through the official PMMY portal or by visiting the concerned financial institution where they applied for the loan.

Official Sources And References

Brochure of schemes: Click Here

FAQs Related scheme: Click Here

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