How to apply Pradhan Mantri Mudra Yojana (PMMY) 2025

The Pradhan Mantri Mudra Yojana (PMMY) is a flagship government scheme aimed at providing financial assistance to small and micro enterprises across India. Here’s a step-by-step guide on how to apply for a Pradhan Mantri Mudra loan Yojana.

Pradhan Mantri Mudra Yojana (PMMY) Overview

The Pradhan Mantri Mudra Yojana (PMMY), Launched by Prime Minister Narendra Modi in April 2015, is a pivotal scheme aimed at providing loans to non-corporate, non-farm small/micro enterprises. This initiative plays a crucial role in promoting financial inclusion and fostering entrepreneurship at the grassroots level in India.

The primary objectives of PMMY are to:

• Provide financial support to small and micro-enterprises.
• Promote job creation and boost self-employment.
• Encourage entrepreneurship, especially among weaker sections of society,
• Facilitate access to credit for unbanked sectors by offering collateral-free loans.

Category of Mudra Yojana

Pradhan Mantri Mudra Yojana offers loans in four categories—Shishu, Kishor, Tarun, and the newly introduced Tarun Plus—based on the stage of growth and funding needs of the micro-enterprise. Below is a brief on each category:

1. Shishu Loans

Shishu loans are designed for budding entrepreneurs and new businesses. These loans provide initial funding to help set up micro-enterprises or meet early-stage capital requirements. The loan amount in the Shishu category is up to Rs 50,000.

Who Should Apply:

• New entrepreneurs who are starting their business from scratch.
• Small businesses that need a small amount of capital.

Shishu Loans Application Form Download 2025

Benefits:

• Low-interest rates to make borrowing affordable.
• Flexibility in repayment schedules.
• Minimal documentation required.

Usage:

• Purchasing raw materials.
• Acquiring machinery or equipment.
• Setting up infrastructure.

2. Kishor Loans

Kishor loans cater to businesses that are already operational but need additional funds to scale up or stabilize their operations. The loan amount in this category ranges between Rs 50,001 and Rs 5 lakh.

Who Should Apply:

• Existing businesses looking to expand their operations.
• Enterprises that need working capital or additional funds for growth.

Kishor Loan Application Form Download 2025

Benefits:

• Higher loan limit compared to Shishu category.
• Competitive interest rates.
• Longer repayment tenures.

Usage:

• Marketing and advertising expenses.
• Enhancement of working capital.
• Upgrading machinery or technology.

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3. Tarun Loans

Tarun loans are intended for established businesses that require significant capital investment to expand further or diversify their operations. The loan amount in this category ranges between Rs 5 lakh and Rs 10 lakh.

Who Should Apply:

• Well-established businesses that require substantial capital.
• Enterprises planning large-scale expansion or diversification.

Benefits:

• Access to higher credit limits.
• Support for large-scale projects.
• Tailored financial solutions based on business needs.

Usage:

• Large-scale infrastructure projects.
• Major technological upgrades.
• Extensive marketing campaigns.

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4. Tarun Plus Loans

In the most recent update, the government introduced the Tarun Plus category, which doubles the previous loan limit under the Mudra Yojana from Rs 10 lakh to Rs 20 lakh. This new category is specifically designed for entrepreneurs who have availed and successfully repaid previous loans under the Tarun category.

Who Should Apply:

• Entrepreneurs who have demonstrated successful repayment history under the Tarun category.
• Established businesses seeking significant capital for major expansion.

Benefits:

• Higher loan limit of up to Rs 20 lakh.
• Encourages responsible borrowing and repayment behavior.
• Provides substantial capital to fuel business growth.

Usage:

• Expanding product lines or services.
• Entering new markets.
• Investing in advanced technology or large-scale infrastructure projects.

How to Choose the Right Category

Selecting the right category of Pradhan Mantri Mudra Yojana depends on your business’s stage and funding needs. Assess your financial position, understand the loan amount you require, and choose the category that aligns with your growth plans. Each category offers different advantages and funding levels to support your entrepreneurial journey.

Step-by-Step Application Process

To apply for a Mudra loan, follow these steps:

1. Determine Your Loan Category: Identify whether you need a Shishu, Kishor, Tarun, or Tarun Plus loan based on your business needs.
2. Prepare Necessary Documents: Ensure you have all required documents, which typically include:
   • Identity Proof (Aadhaar, PAN, etc.)
   • Address Proof
   • Business Establishment Proof
   • Latest Income Tax Returns (if any)
   • Bank Statements
3. Choose a Lending Institution: Mudra loans are offered by various financial institutions, including:
   • Public Sector Banks
   • Private Sector Banks
   • Regional Rural Banks (RRBs)
   • Small Finance Banks (SFBs)
   • Micro-Finance Institutions (MFIs)
   • Non-Banking Financial Companies (NBFCs)
4. Visit the Bank: Go to the nearest branch of your selected bank or financial institution.
5. Fill Out the Application Form: Request and fill out the Mudra loan application form. Be sure to provide all required information accurately.
6. Submit the Application: Submit the filled application form along with the necessary documents. The bank will process your application and evaluate your creditworthiness.

Interest Rates and Processing Fees

The interest rates for Mudra loans vary between banks and are influenced by RBI guidelines. There may be an upfront fee or processing charge, which is usually waived for Shishu loans.