Starting a business or expanding an existing one can be challenging, especially when you don’t have access to large funds. To support small entrepreneurs, street vendors, and startups, the Government of India launched the Pradhan Mantri Mudra Yojana (PMMY), widely known as the Mudra Loan Scheme. In 2025, the scheme continues to empower millions by offering loans ranging from ₹50,000 to ₹20 lakh without any collateral.
Whether you’re a vegetable seller, beauty salon owner, manufacturer, trader, or freelancer, the Mudra Loan can be a stepping stone for your financial independence and business growth.
🧾 What is the PM Mudra Loan?
The Pradhan Mantri Mudra Yojana (PMMY) was launched in 2015 to provide micro-financing support to non-corporate, non-farm small businesses. The loans under this scheme are classified as Micro Units Development and Refinance Agency (MUDRA) loans, and they are offered by:
- Public Sector Banks
- Private Banks
- Regional Rural Banks (RRBs)
- Small Finance Banks
- Micro Finance Institutions (MFIs)
🔢 Loan Categories Under Mudra Scheme
Mudra Loans are categorized into three types based on the stage of business:
1. Shishu Loan (Up to ₹50,000)
- Ideal for new startups and first-time business owners
- Can be used for working capital, raw materials, tools, etc.
2. Kishore Loan (₹50,001 to ₹5 Lakh)
- For growing businesses that need more capital
- Suitable for expanding inventory, buying machinery, or hiring staff
3. Tarun Loan (₹5 Lakh to ₹20 Lakh)
- For established businesses looking for bigger investments
- Best for manufacturing units, service-based startups, and business scaling
💰 Interest Rates and Repayment
🔸 Interest Rate:
- Varies from 8.5% to 12% per annum depending on the bank and applicant profile
- Lower interest rates for women entrepreneurs and SC/ST applicants
🔸 Loan Tenure:
- Generally from 1 year to 5 years
- Can be extended up to 7 years in special cases
🔸 Processing Fee:
- No processing fee for Shishu loans
- Low processing charges for Kishore and Tarun
🔸 No Collateral Required:
- Mudra Loans are completely unsecured
- No need to pledge property or gold as security
📌 Key Features of PM Mudra Loan 2025
- ✅ Loan amount from ₹50,000 to ₹20 lakh
- ✅ No collateral or guarantor required
- ✅ Flexible repayment period
- ✅ Loans available to individuals, proprietors, partnerships, and companies
- ✅ Encourages women entrepreneurship with special benefits
- ✅ Support for a wide range of businesses – retail, service, manufacturing
🧑💼 Who Can Apply?
✅ Eligibility Criteria:
- You must be an Indian citizen
- Age between 18 to 65 years
- You must own or want to start a non-farm income-generating activity
- Applicable for:
- Small manufacturers
- Service providers
- Traders
- Vendors
- Artisans
- Startups
📋 Documents Required
To apply for a Mudra Loan, keep the following documents ready:
- Loan application form (available from the bank or online)
- Proof of identity – Aadhaar, PAN card, Voter ID
- Address proof – Ration card, utility bill, or Aadhaar
- Business plan or proposal
- Bank statement (last 6 months)
- Quotation for assets or machinery (if applicable)
- Passport-sized photographs
🏦 How to Apply for a Mudra Loan in 2025?
🔹 Offline Method:
- Visit your nearest bank branch (SBI, PNB, Canara Bank, HDFC, etc.)
- Ask for the PM Mudra Loan application form
- Fill out the form and attach the required documents
- Submit it to the loan officer
- The loan is usually processed within 7–15 working days
🔹 Online Method:
- Visit the official website of your bank (like SBI or Bank of Baroda)
- Navigate to the PMMY / Mudra Loan section
- Fill out the application form and upload scanned documents
- Track your application status online
Banks may conduct a short interview or request additional details based on your loan amount.
🏭 Popular Businesses Covered Under Mudra Loan
Here are some of the sectors where Mudra Loan is commonly used:
- Vegetable or fruit vendors
- Beauty parlors & salons
- Small manufacturing units
- Grocery shops
- Tailoring units
- Auto repair workshops
- Two-wheeler/taxi purchase for business
- Mobile/DTH recharge businesses
- Dairy, poultry, and fisheries
- Online startups and freelancers
👩🔧 Benefits for Women Entrepreneurs
To empower women under the Stand-Up India and PMMY, women are given:
- Lower interest rates
- Priority processing
- Higher approval chances
- Access to Mahila Coir Yojana and Mudra Mahila Udyam Scheme
Women-led businesses can thrive with Shishu and Kishore loans especially in urban and rural areas.
🚀 Why PM Mudra Loan is Ideal for You
| Feature | Benefit |
|---|---|
| No collateral | 100% unsecured loan |
| Flexible tenure | Up to 7 years |
| Fast approval | Within 7–15 days |
| Government-backed | Trusted and secure |
| For all businesses | Retail, manufacturing, services |
| Minimum paperwork | Simple documentation |
❓ Frequently Asked Questions (FAQs)
🔸 Is CIBIL score needed for Mudra Loan?
Not necessarily. Many banks focus on business viability, especially for Shishu and Kishore loans.
🔸 Can I take more than one Mudra Loan?
You can only have one active Mudra Loan at a time. You may upgrade from Shishu to Kishore or Tarun based on business growth.
🔸 Can salaried individuals apply?
Mudra Loan is only for business purposes, not for salaried individuals or personal use.
🔸 Are there subsidies?
There is no direct subsidy, but you may get interest concessions under linked schemes.
🏁 Final Thoughts
The PM Mudra Loan Yojana 2025 is a golden opportunity for India’s budding entrepreneurs to launch or expand their ventures without the burden of security or high interest. From a ₹50,000 micro-loan to a ₹20 lakh business expansion fund, the scheme is designed to uplift small businesses, generate employment, and strengthen the grassroots economy.
Whether you’re a young entrepreneur, a homemaker wanting to start a beauty salon, or a trader looking to buy new stock – the Mudra Loan can help turn your dream into reality.