Loans for Non-corporate, non-farm small / micro enterprises

MUDRA (Micro Units Development and Refinance Agency) Loan is a main program under the Pradhan Mantri Mudra Yojana (PMMY) by the Government of India to assist micro and small enterprises. The Ministry of Finance oversees the scheme, which provides financial help to people through different financial institutions such as banks and NBFCs. MUDRA loans are organized as Shishu, Kishor, and Tarun to match the requirements and development of each business. Mudra loan eligibility criteria is set for each industry and stage of business.

The Benefits of Mudra Loan

  1. Collateral-Free Financing: Since mudra loans aren’t secured, you won’t have to use your assets as collateral as a first-time entrepreneur or micro-business owner.
  2. Interest rates that are set low: Mudra loans have lower interest rates than private loans, which means small businesses find it simpler to pay them back.
  3. Many Loan Amounts to Choose: There are three categories — Shishu, Kishor, and Tarun — that match the business’s growth stage.
  4. Various ways to pay back the loan: The option to pay back the loan with flexible EMIs over a longer period helps relieve the financial pressure on small enterprises.

Mudra Loan Eligibility Criteria

Mudra loans are designed to give financial help to enterprises in manufacturing, trading, and services whose credit needs are less than ₹10 lakhs. The aim of the scheme is to boost micro and small businesses as they progress.

Depending on the growth of your business and the money you require, Mudra loans are sorted into three categories.

  • Shishu – Loans can be taken up to ₹50,000 and are made for small startups and businesses at the beginning.
  • Kishor – Businesses that need funds to grow can get loans between ₹50,001 and ₹5 lakhs.
  • Tarun – If your business is proven, you can apply for loans from ₹5 lakhs to ₹10 lakhs.

Those who want to apply for a Mudra loan must satisfy certain criteria.

  • Be an Indian citizen who gets income from a non-farm activity in manufacturing, trading, or services.
  • Take part in a non-corporate and non-agricultural segment of small businesses, for example, proprietorships, partnership firms, or small units.
  • Prepare a business plan that explains the kind of business, the financial plans, and how the loan will be used.
  • Be put into a Shishu, Kishor, or Tarun loan category, depending on the amount of money they require.

Small-scale entrepreneurs benefit from mudra loans, as these loans are both easy to obtain and are given according to the right stages of business development.

How Finline Helps You Apply for a Mudra Loan

Get Your Project Report in Just 3 Simple Steps

🔹 Step 1: Select Your Business Type
 Choose your business category—whether it’s a small manufacturing unit, service provider, retailer, or startup. Finline automatically aligns your report with what Mudra loan officers expect to see.

🔹 Step 2: Answer Easy, Guided Questions
 No complex forms or financial jargon. Simply answer a few user-friendly questions about your business idea, operations, and financial needs. Finline’s smart system converts your inputs into a structured project report.

🔹 Step 3: Download a Bank-Ready Project Report
 Get your professionally formatted project report instantly in PDF or Word. It’s editable, lender-approved, and ready to submit with your Mudra loan application—anytime, anywhere.

Frequently Asked Questions – Mudra Loan Eligibility Criteria

People operating small businesses like tailoring, food stalls, or mobile repairs and wanting financial help of up to ₹50,000 can apply for support under the Shishu category. This is suitable for businesses that are just getting started.

If you need a Mudra loan for trading business, your company must not be involved in farming, you should have a valid business plan, and you should need less than ₹10 lakhs. Any sole proprietor, partnership, or small retailer can use these loans.

Businesses or startups involved in manufacturing, trading, or services are allowed to apply. You should develop a business model that works and satisfies the requirements for Mudra loans in the Shishu, Kishor, or Tarun categories.

To use the Kishor category (₹50,001 to ₹5 lakhs), your business should be active and have a future for growth, and you should have a clear plan to spend the loan.

Yes, businesses in the service sector like beauty parlors, mobile repairing professionals, or tuition centers may get Mudra loans as long as they are eligible and need less than ₹10 lakhs.

Absolutely. Those who offer income-generating services as freelancers, local artisans, or service providers can get a Mudra loan as long as their business meets the guidelines.

Commonly, you have to submit documents for identity, address, business, and a business plan. There are lenders who request bank statements or quotations for the machinery and tools you wish to purchase, depending on the loan you apply for.

Most banks expect applicants to be at least 18 years old, but some banks may also have a rule that limits the age of customers to 65 to 70 years old. Lenders may have different rules about the age of the borrower.

Of course, women entrepreneurs are encouraged to send in their applications. As a matter of fact, many banks give preferential rates or special offers to businesses led by women under the Mudra Yojana.

If your business is growing and you need more money, you can reapply for a loan in the following category (for example, Shishu to Kishor). The way you repay your debts and how your business is doing will matter a lot.

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