Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana (PMMY) has completely transformed the way small businesses in India access financing. Launched on April 8, 2015, by the Government of India, this flagship scheme is designed to provide collateral-free loans to non-corporate, non-farm small and micro enterprises. As we reach 2025, PMMY has completed a decade of empowering crores of entrepreneurs and driving grassroots economic growth.

Now, let's explore the details of the Pradhan Mantri Mudra Yojana and how it can benefit you.

What is Pradhan Mantri Mudra Yojana?

PMMY is designed to foster financial inclusion by offering easy, collateral-free loans to micro and small enterprises engaged in manufacturing, trading, and services (including allied agricultural activities). The scheme targets businesses that traditionally lacked access to formal credit, enabling them to expand, create jobs, and contribute to the nation’s economic progress.

Objectives of the Pradhan Mantri Mudra Yojana

• The scheme gives you easy loans so you can start a new business or expand your existing small business.
• You can get a loan without needing to provide any security or collateral, making it simple for first-time entrepreneurs.
• By making it easier to get funds, the scheme helps you become self-employed and creates more jobs for others.

Key Features of PMMY

• Loan Amount
  You can avail of loans of up to Rs.10 lakh for non-corporate, non-farm enterprises. And if you're a repeat borrower, the maximum loan amount has been increased to Rs.20  lakh under the new "Tarun Plus" category as of 2024.
• No Collateral Required
  The best part? Loans are collateral-free, which means you don’t have to worry about pledging any assets as security, reducing the risk for you as an entrepreneur.
• Wide Accessibility
  You can easily access these loans from a variety of lenders, including Public Sector Banks, Regional Rural Banks, Cooperative Banks, Private Sector Banks, Micro Finance Institutions (MFIs), and Non-Banking Finance Companies (NBFCs).
• Inclusive Approach
  There’s a special focus on empowering women, SC/ST, and OBC entrepreneurs. In fact, over 68% of beneficiaries are women, and 50% belong to marginalized communities.

PMMY Loan Categories

PMMY loans are structured into three main categories to cater to businesses at different stages of growth:

Interest Rates and Repayment of PMMY

• Interest Rates
  The interest rates depend on the lender and are generally competitive, following RBI guidelines. They also vary based on your borrower profile, so it’s best to check with your bank for specific rates.
• Repayment Tenure
  The repayment tenure is flexible and typically goes up to 5 years, depending on the size and nature of your business. It’s designed to give you enough time to repay without pressure.
• Processing Fees
  For Shishu loans, the processing fees are either minimal or nil. For higher loan categories, fees may vary based on the loan amount, but they’re usually quite reasonable.

Types of Loans Under PMMY

• Business Loans
  These are ideal for setting up or expanding your micro and small enterprises, helping you take that first step or grow further.
• Personal Loans
  Available only if they’re used for business purposes, like buying equipment or covering working capital.
• Business Expansion Loans
  Perfect if you’re looking to scale up, buy machinery, or increase inventory to grow your operations.

Which Banks Provide Pradhan Mantri Mudra Yojana Loans?

You can apply for Pradhan Mantri Mudra Yojana loans through a variety of institutions, including:

• Public and Private sector banks
• Regional rural banks
• Cooperative banks
• MFIs
• NBFCs

Eligibility Criteria for Pradhan Mantri Mudra Yojana

Eligibility

• If you’re an Indian citizen with a viable business plan for a non-farm income-generating activity (like manufacturing, processing, trading, or services), you can apply.
• Your loan requirement should be Rs. 10 lakh or less (unless you're applying under Tarun Plus, which offers up to Rs. 20 lakh).
• Whether you’re running a new or an existing micro or small business, you’re eligible to apply.

Non-Eligibility

• If you want a loan for buying farmland or doing regular farming, PMMY isn’t for you.
• If you need more than ₹20 lakh for your business, PMMY is not for you.

Documents Required for PMMY Application

• Completed loan application form
• Proof of identity and address (Aadhaar Card, PAN Card, etc.)
• Business plan or proposal
• Proof of business address and existence
• Recent passport-size photographs

How to Apply for Pradhan Mantri Mudra Yojana?

Offline Application

Step 1: Visit any participating bank, NBFC, or MFI branch.

Step 2: Fill out the Pradhan Mantri Mudra Yojana application form available at the branch or downloadable it from the PMMY official website.

Step 3: Submit the required documents like identity proof, address proof, business plan, and more.

Step 4: The bank will process your application based on its eligibility norms.

Step 5: Upon approval, the loan amount is disbursed to your bank account.

Online Application

Step 1: Many banks now offer online application facilities through their websites or dedicated portals.
Step 2: Fill out the Pradhan Mantri Mudra Yojana application form online with your details.
Step 3: Then, submit the form digitally.
Step 4: Track your application regularly. Some banks also offer the PMMY app, which makes applying and tracking your application even easier.
Step 5: Once your application is approved, the loan amount is disbursed to your bank account.
Whether you choose the offline or online route, the process is designed to be simple and accessible!

Benefits of Pradhan Mantri Mudra Yojana

• Easy Loans for Small Businesses
  You can get loans from ₹50,000 up to ₹10 lakh to start or expand your small business in manufacturing, trading, or services, without any complicated paperwork.
• No Collateral Needed
  You don’t have to provide any security or collateral to get a Mudra loan, making it simple and stress-free for first-time entrepreneurs.
• Low Interest Rates and Flexible Repayment
  Mudra loans come with low interest rates and flexible repayment options, so you can pay back the loan comfortably.
• Supports All Stages of Business Growth
  Whether you’re just starting out or want to expand, there are three loan categories such as Shishu, Kishore, and Tarun to match your business needs.
• Boosts Self-Employment and Local Jobs
  By making it easier to get funds, the scheme helps you become self-employed and creates more job opportunities in your area.

Real-World Examples of PMMY

• Toy and Gift Shop
• Auto Rickshaw Driving Business
• Herbal Tooth Powder Manufacturing Unit
• Broom Manufacturing and Supply Business
• Steel Products Manufacturing and Trading
• Pesticides and Fertilizers Trading Business
• Tailoring and Stitching Unit
• Tea Stall
• Salon
• Mechanic Shop
• Mobile Repair Business

Related Government Support Plans with PMMY Scheme

Final Words

The Pradhan Mantri Mudra Yojana is a true reflection of India’s dedication to inclusive growth and financial empowerment. By offering easy access to credit for even the smallest entrepreneurs, PMMY has created new opportunities, sparked innovation and strengthened the foundation of our economy.

Whether you're just starting out as an entrepreneur or looking to scale your small business, PMMY provides the financial support and trust you need to realize your dreams.