Pradhan Mantri Mudra Yojana (PMMY): Benefits, Eligibility and How to Apply

• Eligible borrowers: Individuals, Proprietary concerns, Partnership Firms, Private Ltd. Companies, Public Companies and any other legal forms.
• The loan must be for an income-generating micro enterprise in the non-farm sector, in manufacturing, trading or services, including activities allied to agriculture such as poultry, dairy and beekeeping.
• The applicant should not be a defaulter to any bank or financial institution and should have a satisfactory credit track record.
• Individual borrowers may be required to have the skills, experience or knowledge needed for the proposed activity.
• Any requirement of educational qualification is assessed based on the nature and needs of the proposed activity.

Who Is Not Eligible

• Defaulters to any bank or financial institution.

• Keep ready your ID proof, address proof, passport size photograph, signature, and proof of identity / address of the business enterprise.
• Go to the PM MUDRA official website and select the Udyamimitra portal.
• Click "Apply Now" for the Mudra loan.
• Select New Entrepreneur, Existing Entrepreneur or Self-employed Professional.
• Enter the applicant's name, email and mobile number and generate the OTP to register.
• After registration, fill in your personal and professional details.
• If you need help preparing a project proposal, select a hand-holding agency; otherwise click "Loan Application Center" and apply.
• Select the loan category required: Mudra Shishu, Mudra Kishore or Mudra Tarun.
• Fill in business information such as business name and activity, and select the industry type: Manufacturing, Service, Trading or activities allied to agriculture.
• Fill in other details such as owner details, existing banking / credit facilities, proposed credit facilities, future estimates and preferred lender.
• Attach all required documents and submit the application.
• Note down the Application Number generated after submission for future reference.
• You can also approach a lending institution branch where you have a savings account and apply in the format provided by that institution.

About the Scheme

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of the Government of India that makes micro credit of up to Rs. 20 lakh available to income-generating micro enterprises. The loans are given by Member Lending Institutions (MLIs): Public Sector Banks, Private Sector Banks, State operated cooperative banks, regional rural banks, Micro Finance Institutions, NBFCs, Small Finance Banks and other financial intermediaries approved by Mudra Ltd. The scheme is meant for small manufacturing units, service units, shopkeepers, fruit and vegetable vendors, truck operators, food-service units, repair shops, machine operators, artisans, food processors and similar small businesses.

Key Benefits Explained

The four loan categories reflect the growth stage and funding needs of the business. Shishu covers loans up to Rs. 50,000, Kishore covers above Rs. 50,000 up to Rs. 5 lakh, and Tarun covers above Rs. 5 lakh up to Rs. 10 lakh. Tarun Plus offers up to Rs. 20 lakh to entrepreneurs who have successfully repaid earlier loans under the Tarun category. Any activity that generates income can qualify; for example, Khadi activity under the textile sector, and a CNG tempo or taxi bought for commercial use, are covered. The loan amount depends on the needs of the proposed activity, and repayment terms are set according to its expected cash flow.

Who Should Apply

Individuals, proprietary concerns, partnership firms and companies running or starting an income-generating activity can apply. Lenders look for a clean record: the applicant should not be a defaulter to any bank or financial institution. Individual borrowers may need the skills or experience for the proposed activity, and any educational qualification requirement depends on the nature of that activity.

Applying: Practical Points

• Apply online on the Udyamimitra portal, or approach a lending institution branch, including one where you hold a savings account, and use its loan application format.
• For a Shishu loan, keep identity and residence proofs, two recent colour photographs, the machinery quotation and supplier details, and business licence or registration documents ready.
• For Kishore, Tarun and Tarun Plus loans, you will also need a six-month bank statement (if you have an existing banker), a project report, current-year sales, and, for loans of Rs. 2 lakh and above, the last two years' balance sheets with tax returns and projected balance sheets.
• MUDRA engages no agents or middlemen. Keep away from anyone posing as an agent or facilitator of MUDRA/PMMY.
• Upfront fees depend on the bank, and most banks waive them for Shishu loans.