How to Apply for Mudra Loan? | Eligibility, Interest Rate Calculator & More

Are you an aspiring entrepreneur or a small business owner in India looking for financial assistance to grow your venture? The Pradhan Mantri Mudra Yojana (PMMY), often referred to as the Mudra Loan scheme, could be the perfect solution for you. This initiative by the Government of India aims to provide funding to non-corporate, non-farm small and micro-enterprises. This comprehensive guide will walk you through how to apply for a Mudra loan, detailing the eligibility criteria, interest rates, and much more.

Understanding Mudra Loans

Before diving into the application process, let’s understand what Mudra loans are all about. Launched in 2015, PMMY is facilitated by Micro Units Development and Refinance Agency Ltd. (MUDRA), a non-banking financial institution. MUDRA doesn’t directly lend to entrepreneurs but provides refinance to banks, Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs) so that they can extend loans to small businesses.

There are three types of loans offered under the Mudra scheme, catering to different stages of business needs:

• Shishu Loan: Covers loans up to ₹50,000. This is ideal for startups and businesses in their initial stages.
• Kishore Loan: Covers loans ranging from ₹50,001 to ₹5,00,000. This is for established businesses looking to expand.
• Tarun Loan: Covers loans ranging from ₹5,00,001 to ₹10,00,000. This caters to businesses with significant growth potential.

Who is Eligible for a Mudra Loan?

1. Who can apply?

• Indian Citizens: The applicant must be an Indian citizen.  
• Non-Corporate Small Business Segment (NCSBS): This is the primary target segment and includes:
  • Sole Proprietorships: Businesses owned and run by one person. For example, a local grocery store owner or a freelance consultant.  
  • Partnership Firms: Businesses owned and run by two or more individuals who have agreed to share in a business’s profits or losses. For instance, a small manufacturing unit run by two partners.
  • Service Sector Units: Businesses that provide services rather than tangible goods. This can include:
    • Repair shops (e.g., electronics, vehicles)
    • Beauty parlours and salons
    • Tailoring units
    • Dry cleaning services
    • Courier services
    • DTP and photocopying facilities
    • Gymnasiums
    • Pharmacies
    • Professionals like doctors, lawyers, CAs, architects
  • Small Manufacturing Units: Businesses involved in the production of goods on a small scale. Examples include:
    • Food processing units (making pickles, jams, bread, etc.)
    • Textile-related businesses (handloom, powerloom, garment making)
    • Handicraft makers
    • Small engineering workshops
  • Shopkeepers, Traders, and Vendors: Individuals involved in buying and selling goods. This includes:
    • Grocery store owners
    • Fruit and vegetable vendors
    • Cloth merchants
    • Other small retailers
  • Truck Operators: Owners of commercial vehicles used for transporting goods.
  • Food Service Units: Businesses involved in preparing and serving food. This includes:
    • Small restaurants and eateries
    • Catering services
    • Sweet shops
  • Artisans: Skilled craftspeople who create products by hand.
  • Micro and Small Industries (MSMEs): As defined under the MSMED Act 2006, engaged in manufacturing, trading, or services.  
  • Activities Allied to Agriculture: Starting from April 1, 2016, the Mudra scheme also covers certain allied agricultural activities that support livelihood, such as:
    • Poultry  
    • Dairy
    • Beekeeping  
    • Fisheries  
    • Horticulture  
    • Agro-processing  

2. Loan Categories and Business Stage

The eligibility also indirectly depends on the type of Mudra loan you are seeking, which aligns with the stage of your business:

• Shishu (up to ₹50,000): Primarily for startups and businesses in their initial stages needing funds for raw materials, small equipment, etc.  
• Kishore (₹50,001 to ₹5,00,000): For established businesses looking to expand their operations, purchase more significant equipment, or need more working capital.  
• Tarun (₹5,00,001 to ₹10,00,000): For well-established businesses seeking substantial funds for further growth, diversification, or larger capital expenditures.  

3. Other Important Criteria

• No Default History: The borrower should not have a history of defaulting on loans from any bank or financial institution. A satisfactory credit track record is generally required.
• Business Plan: Applicants need to have a viable business plan outlining the purpose of the loan, projected financials, and how it will generate income.
• Skills and Experience: For individual borrowers, lenders may assess whether they possess the necessary skills, experience, and knowledge to undertake the proposed business activity.  
• Age: Generally, applicants should be at least 18 years old, and some lenders might have an upper age limit (e.g., 65 years).  
• Women Entrepreneurs: The scheme actively encourages women entrepreneurship. Women engaged in any eligible business are encouraged to apply, and some lenders may offer special schemes or slightly better terms for women borrowers.  

In summary, if you are an Indian citizen running or planning to start a small business in the manufacturing, trading, or service sector (including certain allied agricultural activities) and require financial assistance up to ₹10 lakh, you are likely eligible for a Mudra loan, provided you have a sound business plan and a good credit history.

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How to Apply for a Mudra Loan: A Step-by-Step Guide

Now, let’s get to the most crucial part: how to apply for a Mudra loan. The application process is generally straightforward, but it’s essential to be well-prepared with the necessary documents and information.

Step 1: Identify the Right Lending Institution

Choosing the right lender is the foundation of your application process. Different institutions may have varying processes, interest rates, and specific requirements. Here’s a detailed look at your options:

• Public Sector Banks: These are government-owned banks and often have a wide reach across the country. They are usually a primary point of contact for government schemes like Mudra. Examples include the State Bank of India (SBI), the Punjab National Bank (PNB), the Bank of Baroda, etc.
  • Pros: Generally perceived as reliable, often have extensive branch networks, and are familiar with government schemes.
  • Cons: Sometimes, processing times may be longer due to bureaucratic procedures.
• Private Sector Banks: These are privately owned banks that also participate in the Mudra scheme. Examples include HDFC Bank, ICICI Bank, Axis Bank, etc.
  • Pros: Can offer faster processing times and may have more streamlined online processes.
  • Cons: Interest rates might sometimes be slightly higher compared to public sector banks.
• Regional Rural Banks (RRBs): These banks operate at the regional level and are designed to cater to the rural population. They can be a good option if your business is located in a rural area. Examples include Pragathi Krishna Gramin Bank, Andhra Pradesh Grameena Vikas Bank, etc.
  • Pros: Strong understanding of local rural economies and needs.
  • Cons: Limited branch network compared to national banks.
• Small Finance Banks (SFBs): These banks are licensed to provide basic banking services primarily to unserved and underserved sections, including small businesses. Examples include AU Small Finance Bank, Equitas Small Finance Bank, etc.
  • Pros: Focus on small businesses and may have tailored products.
  • Cons: Relatively newer compared to traditional banks.
• Microfinance Institutions (MFIs): These institutions provide small loans to low-income individuals and micro-enterprises. They often have a strong presence in reaching grassroots-level businesses. Examples include Bandhan Bank (initially an MFI), Grameen Koota, etc.
  • Pros: Specialises in micro-lending and may have simpler documentation processes for very small loans (Shishu category).
  • Cons: Interest rates might be higher compared to banks.
• Non-Banking Financial Companies (NBFCs): These are financial institutions that provide banking services without holding a banking license. Some NBFCs also participate in the Mudra scheme. Examples include Bajaj Finance, Aditya Birla Finance, etc.
  • Pros: Can offer quick processing and flexible loan terms.
  • Cons: Interest rates might be higher, and they may have stricter eligibility criteria in some cases.

How to Choose:

• Proximity: Consider lenders with branches close to your business or residence for ease of interaction and follow-up.
• Reputation and Service: Research the lender’s reputation and customer service. Talk to other small business owners about their experiences.
• Interest Rates and Charges: Inquire about the interest rates, processing fees, and other charges upfront and compare offers.
• Loan Products: Understand the specific Mudra loan products offered by each lender and see if they align with your needs.
• Online Presence: Check if the lender has a user-friendly website and online application options, which can save time.

Step 2: Choose the Appropriate Loan Category

Selecting the right loan category (Shishu, Kishore, or Tarun) is crucial as it determines the loan amount you can apply for and might influence the lender’s assessment.

• Shishu (up to ₹50,000): This is ideal for:
  • Startups are in their very early stages.
  • Micro-enterprises need small amounts for working capital, minor repairs, or purchasing basic tools.
  • Vendors or small service providers with limited initial capital requirements.
• Kishore (₹50,001 to ₹5,00,000): Suitable for:
  • Established small businesses are looking to expand their operations.
  • Businesses need funds for purchasing small machinery or equipment.
  • Enterprises require a moderate increase in working capital.
  • Businesses with a proven track record and potential for growth.
• Tarun (₹5,00,001 to ₹10,00,000): Meant for:
  • Growing businesses with a solid foundation and established market presence.
  • Enterprises needing significant capital for expansion, modernisation, or acquiring larger assets.
  • Businesses with a clear growth plan and the capacity to handle larger loan amounts.

How to Decide:

• Assess your current and future financial needs accurately. Don’t borrow more than you need, but ensure you have enough to meet your objectives.
• Consider your repayment capacity. A larger loan (Tarun) will have higher EMIs. Ensure your business can comfortably service the debt.
• Align the loan category with your business lifecycle. A new business might start with Shishu, while a growing one might opt for Kishore or Tarun.

Step 3: Prepare Your Business Plan

Your business plan is a critical document that convinces the lender of the viability and potential of your business. A well-articulated plan demonstrates your seriousness and understanding of your venture. Key elements include:

• Executive Summary: A brief overview of your business, its goals, and your loan request.
• Company Description: Details about your business – its nature, products or services offered, target market, legal structure, and history (if applicable).
• Promoter Profile: Information about the business owners, their educational qualifications, relevant experience, and skills. Highlight any prior business success or industry knowledge.
• Market Analysis: Your understanding of the industry, target customers, competition, and your business’s competitive advantages. Include market trends and potential growth opportunities.
• Products and Services: A detailed description of what you offer, including unique selling propositions and how they meet customer needs.
• Marketing and Sales Strategy: How you plan to reach your target market, your pricing strategy, sales channels, and promotional activities.
• Operational Plan: Details about your day-to-day operations, production process (if applicable), sourcing of raw materials, and infrastructure.
• Management Team: Information about key personnel and their roles in the business.
• Financial Projections: This is a crucial section and should include:
  • Projected Sales Revenue: Forecasted sales for the next 1-3 years.
  • Projected Expenses: Estimated costs of goods sold, operating expenses, administrative costs, etc.
  • Profit and Loss Statements: Projected income statements showing your anticipated profits or losses.
  • Cash Flow Projections: Forecast of cash inflows and outflows to ensure you can meet your financial obligations, including loan repayments.
  • Break-Even Analysis: Determining the point at which your revenue equals your total costs.
• Loan Requirement: Clearly state the amount of loan you need, the specific purpose for which you will use the funds (e.g., working capital, machinery purchase), and the repayment plan you envision.
• Collateral Details (if applicable): While Mudra loans are primarily collateral-free, if you are offering any security voluntarily or if the lender requires it for a larger amount, provide details and valuation of the assets.

ALSO READ – How to Secure Mudra Loan for Your Food Business?

Step 4: Necessary Mudra Loan Documents

Having all the required documents ready will expedite the application process. The specific documents may vary slightly between lenders, but here’s a comprehensive list:

• Identity Proof:
  • Aadhaar Card (most common and preferred)
  • Voter ID Card
  • Passport
  • Driving License
  • PAN Card (mandatory for financial transactions)
• Address Proof: (Must match the current address)
  • Aadhaar Card
  • Recent Utility Bills (electricity, water, gas – not older than 2-3 months)
  • Property Tax Receipt
  • Bank Statement with current address
• Business Ownership Proof:
  • For Sole Proprietorship: Registration certificate (if any), Shop and Establishment License.
  • For Partnership Firm: Partnership Deed, Registration Certificate (if registered).
  • For Companies: Certificate of Incorporation, Memorandum and Articles of Association.
  • Other relevant licenses or permits specific to your business.
• Bank Statements:
  • Last 6 months’ bank statements of your business account (if the business is already operational).
  • Savings account statements may also be required for individual applicants.
• Passport-sized Photographs: Usually 2-4 recent photographs of the applicant(s).
• Quotation of Machinery or Other Assets to be Purchased (if applicable): If you are taking the loan to buy specific equipment, provide the vendor’s quotation.
• Business Plan: As detailed in Step 3.
• ITR (Income Tax Returns) (if applicable): For existing businesses, the lender might ask for the last 1-2 years’ Income Tax Returns.
• Balance Sheet and Profit & Loss Account (if applicable): For existing businesses, audited financial statements for the past few years might be required.
• Caste Certificate (if applicable): For availing of any specific benefits for certain categories.
• Any other documents as required by the specific lender: Be prepared for additional requests based on their internal policies and your business type.

Tip: Organise your documents neatly in a file to avoid delays during submission. Make sure you have photocopies as well as originals for verification.

Step 5: Approach the Lender

Once you have identified a lender and prepared your business plan and documents, it’s time to make contact.

• Visit the Branch: Go to the nearest branch of your chosen bank, NBFC, or MFI and inquire about the Mudra loan scheme. Ask to speak to the relevant loan officer or the branch manager.
• Online Inquiry: Many lenders have information about Mudra loans on their websites. You might be able to initiate an inquiry or even download the application form online. Some may have online application portals.
• Initial Discussion: Explain your business idea and your need for a Mudra loan. The loan officer will provide you with information about their specific Mudra loan products, eligibility criteria, interest rates, and the application process.
• Collect Application Form: Obtain the official Mudra loan application form from the lender.

Be Prepared to Ask Questions: Don’t hesitate to ask clarifying questions about the interest rates, fees, repayment terms, security requirements (if any), and the expected processing time.

Step 6: Fill Out the Application Form

The application form will require you to provide detailed information about yourself, your business, and your loan requirements.

• Read Carefully: Go through each section of the form thoroughly before filling it. Understand what information is being requested.
• Provide Accurate Information: Ensure all the details you provide are correct and match the information in your supporting documents. Any discrepancies can lead to delays or rejection.
• Fill All Mandatory Fields: Do not leave any mandatory fields blank. If a particular section is not applicable to you, mention “NA” (Not Applicable).
• Use Clear and Legible Writing: If filling out a physical form, write clearly and legibly. If filling out an online form, double-check the information before submitting.
• Attach Supporting Documents: Ensure you attach all the required documents as mentioned in the application form or by the loan officer.

Step 7: Submit the Application and Documents

Once you have filled out the application form and gathered all the necessary documents, you need to submit them to the lender.

• In-Person Submission: If you obtained the form from a branch, submit it along with the documents to the designated loan officer. Get an acknowledgement receipt for your submission.
• Online Submission: If applying online, follow the instructions on the lender’s portal to upload the documents and submit the application electronically. You should receive a confirmation of submission.

Click here to apply for Mudra Loan

Step 8: Loan Appraisal and Sanction

After you submit your application, the lender will begin the appraisal process. This involves:

• Verification of Documents: The lender will verify the authenticity and completeness of the documents you have submitted.
• Credit Assessment: They will check your credit history and repayment capacity. This might involve checking your CIBIL score or other credit bureau reports.
• Business Plan Evaluation: The lender will thoroughly review your business plan to assess the viability and potential success of your venture. They will look at your market analysis, financial projections, and management team.
• Interview or Discussion: The loan officer may call you for an interview to discuss your business in more detail and clarify any aspects of your application.
• Site Visit (if required): For existing businesses or for certain types of projects, the lender might conduct a site visit to assess your operations and infrastructure.
• Loan Sanction: If the lender is satisfied with their assessment, they will sanction your loan. You will receive a sanction letter outlining the loan amount, interest rate, repayment terms, and other conditions.

Be Prepared for Queries: Respond promptly and honestly to any queries raised by the lender during the appraisal process.

Step 9: Disbursement of Loan

Once your loan is sanctioned, the final step is the disbursement of the funds.

• Acceptance of Terms: You will need to formally accept the terms and conditions mentioned in the sanction letter.
• Execution of Loan Agreement: You will be required to sign a loan agreement, which is a legally binding document outlining the terms of the loan.
• Disbursement: The loan amount will be disbursed to your bank account, as specified in the application. The mode of disbursement might vary depending on the lender and the purpose of the loan (e.g., direct transfer, demand draft).

Follow-up: After disbursement, ensure you utilise the funds for the intended purpose as outlined in your business plan. Maintain regular communication with the lender and adhere to the repayment schedule.

Understanding Mudra Loan Interest Rates

1 . Lending Institution is Key:

• Public Sector Banks: Often have interest rates linked to their Marginal Cost of Funds based Lending Rate (MCLR) or other benchmark rates. Historically, they might offer slightly lower rates, but this isn’t always the case.
  • Example: As of May 2025, a public sector bank might offer Mudra loans starting from Repo Rate + a certain spread (e.g., Repo Rate + 4.40% as seen with Indian Bank’s online Shishu Mudra Loan). With the current Repo Rate being dynamic, this translates to a variable interest rate.  
• Private Sector Banks: Their interest rate policies are also linked to their cost of funds and risk assessment. They might have more flexibility in pricing.
• Regional Rural Banks (RRBs) and Small Finance Banks (SFBs): These may have rates influenced by their refinancing costs from MUDRA and their operational focus on specific regions and borrower segments.
• Micro Finance Institutions (MFIs) and Non-Banking Financial Companies (NBFCs): Interest rates from these institutions can sometimes be higher due to their higher cost of funds and the typically smaller loan amounts they handle, which involve higher servicing costs per unit. However, they often cater to borrowers with limited access to traditional banking.  

2 . Loan Category (Shishu, Kishore, Tarun):

There’s no strict rule, but the perceived risk associated with the loan amount and the business’s stage can play a role.

• Shishu: Loans up to ₹50,000 for startups might sometimes have slightly higher rates due to the higher perceived risk of new ventures. However, some lenders offer competitive rates to encourage micro-entrepreneurship.
• Kishore: Loans between ₹50,001 and ₹5,00,000 for more established businesses will have rates based on the lender’s risk assessment of the specific business.
• Tarun: Loans between ₹5,00,001 and ₹10,00,000 for larger and more established enterprises will also have rates determined by the lender’s risk evaluation.

3 . Borrower’s Credit History and Score:

• A good CIBIL score (or equivalent credit bureau score) demonstrates responsible borrowing behaviour and can help you secure a lower interest rate. Banks and NBFCs heavily rely on this.  
• A poor credit history signals higher risk and can lead to higher interest rates or even loan rejection.  

4 . Business Risk Profile:

• Lenders assess the viability and potential of your business. Factors like the industry you are in, your business plan, your experience, and the market demand for your product/service all contribute to the risk assessment. A lower-risk business is more likely to get a better interest rate.  

5 . Loan Amount and Tenure:

• The specific loan amount you are seeking and the repayment tenure you choose can influence the interest rate offered. Longer tenures might sometimes carry slightly higher rates to compensate the lender for the extended risk.

6 . Prevailing Market Conditions and RBI Regulations:

• Changes in the Reserve Bank of India’s (RBI) benchmark rates (like the Repo Rate) can indirectly affect the lending rates of banks. When the Repo Rate increases, the cost of funds for banks can rise, potentially leading to an increase in loan interest rates.  

7 . Lender’s Internal Policies:

• Each bank and financial institution has its own policies on setting interest rates, considering their operational costs, profit margins, and specific risk appetites.  

8 . Government Initiatives and Subsidies:

• Occasionally, the government might introduce interest subvention schemes for specific categories of Mudra borrowers (e.g., women entrepreneurs, certain sectors). Always inquire with the lender about any such applicable benefits. For instance, there have been schemes in the past offering a small percentage of interest subsidy.

ALSO READ – How to Get a Business Loan for a Startup in India? A Complete Guide

Mudra Loan Interest Calculator

Since MUDRA doesn’t fix interest rates, there isn’t a single “Mudra Loan Interest Rate Calculator.” Instead, you need to use the standard EMI (Equated Monthly Instalment) calculator with the interest rate quoted by the specific lender you are considering.

Here’s how the EMI is calculated

EMI=(1+r)n−1P×r×(1+r)n​

Where:

• EMI = Equated Monthly Instalment (the fixed amount you’ll pay monthly)
• P = Principal Loan Amount (the amount you borrow)
• r = Monthly Interest Rate (Annual Interest Rate / 12 / 100)
• n = Loan Tenure in Months (the total number of monthly payments)

Steps to Calculate Potential EMI

1 . Get Interest Rate Quotes: Contact multiple banks, NBFCs, and MFIs and inquire about their current interest rates for the Mudra loan category you are interested in (Shishu, Kishore, or Tarun) and for your specific business profile.

• Example: Bank A quotes an annual interest rate of 10% for a Kishore loan. Bank B quotes 11%.

2 . Determine Loan Amount (P): Decide on the amount of money you need to borrow.

• Example: You need ₹3,00,000 (3 lakh) for your business expansion.

3 . Decide on Loan Tenure (n): Choose the repayment period in months.

• Example: You opt for a 5-year loan, which is 5 * 12 = 60 months.

4 . Calculate Monthly Interest Rate (r): Convert the annual interest rate to a monthly rate.

• For Bank A (10% annual): r = 10 / 12 / 100 = 0.008333
• For Bank B (11% annual): r = 11 / 12 / 100 = 0.009167

5 . Use the EMI Formula or an Online Calculator: You can either plug the values into the EMI formula or use one of the many free online EMI calculators available on bank websites or financial portals.

• Using an Online Calculator (Recommended for ease): Simply enter the Principal Loan Amount, Annual Interest Rate, and Loan Tenure (in months) into the calculator. It will instantly give you the EMI.
  
• Using the Formula (for Bank A example): EMI=(1+0.008333)60−1300000×0.008333×(1+0.008333)60​ EMI≈(1.008333)60−1300000×0.008333×(1.008333)60​ EMI≈1.6453−12499.9×1.6453​ EMI≈0.64534113.08​ EMI≈₹6374.75
  
• Similarly, calculate for Bank B using its interest rate.

6 . Analyse the Results: Compare the EMIs and the total interest payable over the loan tenure for different lenders to make an informed decision. Remember to also factor in any processing fees or other charges.

Where to Find Interest Rate Information

• Bank and NBFC Websites: Most lenders will have information about their loan products, including potential interest rate ranges, on their official websites.
• Branch Visits: Visiting the branch and speaking to a loan officer is a direct way to get specific quotes.
• Online Financial Portals: Some websites aggregate information about loan interest rates from various lenders, although these might be indicative and subject to change.

Important Considerations:

• Quoted rates are often indicative: The actual interest rate offered to you will depend on your specific credit profile and business assessment.
• Check for all charges: Besides the interest rate, inquire about processing fees, documentation charges, and any other costs associated with the loan.
• Understand the type of interest: Is it a fixed rate (remains the same throughout the loan tenure) or a floating rate (linked to a benchmark and can change)? For Mudra loans, rates are often floating or subject to the lender’s internal policies, which can be adjusted.  

Additional Important Points to Consider

• Collateral-Free Loans: One of the biggest advantages of Mudra loans is that they are primarily collateral-free for loans up to ₹10 lakh. However, lenders might ask for hypothecation of assets created from the loan amount.
• Repayment Tenure: The repayment period for Mudra loans can vary depending on the loan amount and the lender’s policies. It generally ranges from 3 to 7 years.
• Processing Fees and Other Charges: Lenders may levy processing fees and other charges, which you should inquire about during the application process.
• Focus on Women Entrepreneurs: The Mudra scheme has a special focus on women entrepreneurs, and many lenders offer specific schemes and concessions for them.
• Credit Guarantee Fund for Micro Units (CGFMU): Mudra loans are covered under the CGFMU, which provides a guarantee to the lenders, encouraging them to lend to small businesses without stringent collateral requirements.

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Conclusion

The Mudra loan scheme is a significant step towards empowering the small business sector in India. By understanding how to apply for a Mudra loan, the eligibility criteria, and the factors influencing interest rates, aspiring and existing entrepreneurs can leverage this scheme to fuel their growth and contribute to the nation’s economy. Remember to do your due diligence, prepare a strong business plan, and compare offers from different lenders to secure the best possible terms for your Mudra loan.

Frequently Asked Questions (FAQs)

1 . Can I apply for a Mudra loan online?

• Yes, many banks and financial institutions that offer Mudra loans have online application facilities on their websites. You can check the specific lender’s website for online application options.

2 . Is collateral required for a Mudra loan?

• Generally, no collateral is required for Mudra loans up to ₹10 lakh. However, lenders may ask for hypothecation of the assets created from the loan amount.

3 . What is the maximum amount I can borrow under the Mudra scheme?

• The maximum loan amount under the Tarun category of the Mudra scheme is ₹10 lakh.

4 . What types of businesses are eligible for a Mudra loan?

• Businesses involved in income-generating activities in sectors like manufacturing, trading, and services, excluding agriculture, are eligible. This includes small manufacturing units, shopkeepers, artisans, and more.

5 . How is the interest rate on a Mudra loan determined?

• The interest rate varies depending on the lending institution, the type of loan, the borrower’s credit history, and prevailing market conditions. MUDRA does not fix the interest rates.

6 . How long does it take to get a Mudra loan approved?

• The processing time can vary depending on the lender and the completeness of your application and documents. It can take anywhere from a few days to a few weeks.

7 . Can a woman entrepreneur get any special benefits under the Mudra scheme?

• Yes, the Mudra scheme has a focus on women entrepreneurs, and many lenders offer specific schemes and concessions to them.

8 . What documents are typically required to apply for a Mudra loan?

• Commonly required documents include identity proof, address proof, business ownership proof, bank statements, and passport-sized photographs. Additional documents may be required by the specific lender.

9 . Can I use a Mudra loan for any purpose?

• Mudra loans are intended for income-generating activities and business-related purposes, such as working capital, purchasing machinery, or expanding operations.

10 . What if my Mudra loan application is rejected?

• If your application is rejected, the lender will usually provide a reason. You can address the shortcomings and reapply to the same or a different lender. It’s also advisable to improve your business plan and creditworthiness.