Pradhan Mantri Mudra Yojana (PMMY): Loan Categories, MUDRA and Key Facts
Last updated: 2026-11-13 · MockMentor
Pradhan Mantri Mudra Yojana (PMMY), launched on 8 April 2015, gives collateral-free loans to non-corporate, non-farm micro and small businesses. It is built around MUDRA (Micro Units Development and Refinance Agency Ltd), a wholly-owned subsidiary of SIDBI.
In one line: Funding the Unfunded: small business loans without collateral, given by banks, RRBs, small finance banks, NBFCs and MFIs and refinanced by MUDRA.
At a glance
| Item | Details |
|---|---|
| Launched | 8 April 2015 |
| Ministry | Finance (Department of Financial Services) |
| MUDRA | Subsidiary of SIDBI, registered with RBI as an NBFC; a refinancer, not a direct lender |
| Collateral | None |
| Interest | Set by lenders, linked to their benchmark rate |
| Guarantee | Credit Guarantee Fund for Micro Units (CGFMU), managed by NCGTC since 2016 |
Loan categories
| Category | Loan size |
|---|---|
| Shishu | Up to ₹50,000 |
| Kishor | ₹50,001 to ₹5 lakh |
| Tarun | ₹5 lakh to ₹10 lakh |
| Tarun Plus | Up to ₹20 lakh, for those who repaid a Tarun loan (Budget 2024-25) |
Other features
- Covers manufacturing, trading, services and activities allied to agriculture such as dairy, poultry and fisheries.
- A MUDRA Card (RuPay) lets borrowers draw working capital as needed, so interest is paid only on what is used.
- No processing fee on Shishu loans.
- Applications also through the JanSamarth portal.
Possible exam questions
- Has Mudra improved credit to micro enterprises, or mainly added to bank risk? Discuss.
- Why do micro enterprises struggle to get formal credit in India?
Complete notes in our courses: this page gives the essentials. The Super-Elite and Elite courses carry the full chapter with every update merged in, plus practice MCQs. Compare the courses.
More in Finance Ministry schemes
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