The PM Mudra Yojana continues to play a significant role in expanding access to institutional credit for small entrepreneurs and enterprises across India by providing collateral-free loans of up to ₹20 lakh.
The scheme, formally known as the Pradhan Mantri Mudra Yojana (PMMY), was launched on April 8, 2015, to facilitate financial support for income-generating activities across multiple sectors.
According to information shared by the Department of Financial Services (DFS), the PM Mudra Yojana enables eligible individuals with viable business plans to avail loans for small business enterprises in the manufacturing, trading, and service sectors, including activities allied to agriculture.
The scheme provides collateral-free credit through Member Lending Institutions (MLIs), which include Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs).
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Loan Categories under PM Mudra Yojana
The PM Mudra Yojana offers loans under four categories designed to support businesses at different stages of growth:
- Shishu: Loans up to ₹50,000
- Kishor: Loans above ₹50,000 and up to ₹5 lakh
- Tarun: Loans above ₹5 lakh and up to ₹10 lakh
- Tarun Plus: Loans above ₹10 lakh and up to ₹20 lakh
The Tarun Plus category was introduced with effect from October 24, 2024, for entrepreneurs who have already availed and successfully repaid loans under the Tarun category.
Under this new category, eligible borrowers can receive collateral-free loans of up to ₹20 lakh to expand their businesses further.
Supporting Small Businesses and Women Entrepreneurs
The PM Mudra Yojana supports a wide range of sectors, including small businesses, handicrafts, agriculture-allied activities, and traditional enterprises.
These sectors form the backbone of livelihood generation for many individuals, especially in rural and semi-urban areas.
A significant impact of the PM Mudra Yojana has been observed among women entrepreneurs. Many women, who often lack collateral assets or formal credit histories, have benefited from the scheme’s collateral-free lending framework, enabling them to start or expand income-generating activities.
Simplified Loan Process for Faster Disbursal
To improve accessibility and ensure faster loan processing under the PM Mudra Yojana, the Government has taken several measures to simplify the loan application process. One such initiative is the Jan Samarth portal, which integrates multiple credit-linked schemes.
The portal currently hosts 15 credit-linked schemes and allows applicants to apply for loans through either a self-service digital journey or an assisted application process.
These measures are intended to streamline access to institutional finance and ensure timely loan disbursal for eligible applicants under the PM Mudra Yojana.
The details regarding the PM Mudra Yojana were shared by Minister of State for Micro, Small and Medium Enterprises Shobha Karandlaje in a written reply in the Lok Sabha on March 12, 2026.
