Pradhan Mantri Mudra Yojana (PMMY)
Government of India
Pradhan Mantri Mudra Yojana (PMMY)
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The Pradhan Mantri Mudra Yojana is run by the Government of India through the Micro Units Development & Refinance Agency Ltd. and the Department of Financial Services, Ministry of Finance. It was launched on 8 April 2015. Its purpose is to provide access to credit for non-corporate, non-farm small/micro enterprises engaged in manufacturing, trading and services whose credit needs are below a specified limit. Your business as a micro or small entrepreneur can benefit because the scheme eases access to organised institutional credit without depending solely on large collateral or formal bank-loans.
Key Features
Loan facility up to a specified ceiling
PMMY enables micro/small enterprises to access finance up to a limit – originally up to ₹10 lakh, and more recently up to ₹20 lakh under Tarun Plus category
Three/four categories
"Shishu" up to ₹50,000, "Kishor" from above ₹50,000 to ₹5 lakh, "Tarun" from above ₹5 lakh to ₹10 lakh. A new category "Tarun Plus" up to ₹20 lakh for repeat borrowers was introduced.
Term loan and working capital
The scheme covers credit needs for business expansion, equipment purchase, working capital and marketing support for micro units.
Manufacturing, trading, services, allied activities
Businesses in non-farm sectors, including transport vehicles, food processing, allied agricultural services are eligible.
No collateral or third-party guarantee
Many lenders provide PMMY loans without requiring traditional collateral, making it easier for micro enterprises to access credit.
Financial Assistance
| Component | Assistance | Details |
|---|---|---|
| Loan Quantum | Up to ₹20 lakh | Example: If your micro enterprise needs ₹12 lakh for purchase of machinery, under Tarun Plus you may approach for up to ₹20 lakh. |
| Categories / Growth Stages | Shishu (≤ ₹50,000), Kishor (> ₹50,000 to ≤ ₹5 lakh), Tarun (> ₹5 lakh to ≤ ₹10 lakh), Tarun Plus (> ₹10 lakh to ≤ ₹20 lakh) | Example: A new micro unit needing ₹40,000 falls under Shishu. One needing ₹4 lakh falls under Kishor. |
| Security / Collateral Requirement | Often no collateral / third-party guarantee required up to eligible limits | Example: As an MSME you may approach a bank for a PMMY loan of ₹3 lakh and the lender may approve without requiring full collateral under the scheme norms. |
Eligibility Criteria
Who Can Apply
Eligible Candidates
- 1Micro and small enterprises engaged in manufacturing, trading, or services.
- 2Individuals, proprietary concerns, partnership firms, and micro-entrepreneurs.
- 3Start-ups in non-farm, non-corporate sectors.
Who Cannot Apply
Ineligible Candidates
- Medium or large-scale industries.
- Agricultural activities covered under farm credit schemes.
- Applicants with existing defaults in loan repayment.
Documents Required
Identity proof of applicant/business owner.
Mandatory
Address proof of applicant.
Mandatory
Business registration/registration of enterprise.
Mandatory
Bank account statement of business or financial projections.
Mandatory
Business plan / purpose of loan.
Mandatory
KYC of business and relevant business documents.
Mandatory
How to Apply
Bank Branch
- 1Visit your nearest bank/NBFC/MFI branch.
- 2Request the MUDRA loan application form.
- 3Fill in personal, business, and financial details.
- 4Submit required documents; the lender will verify eligibility.
- 5Loan is sanctioned under Shishu, Kishor, or Tarun category.