MUDRA Yojana 2026 — Up to ₹20 Lakh Collateral-Free Business Loan (Tarun Plus Category): Collateral-free business loan up to ₹20 lakh under new Tarun Plus category — four tiers: Shishu, Kishore, Tarun, Tarun Plus.Shishu Loan: Up to ₹50,000. Kishore Loan: ₹50K - ₹5 Lakh. Tarun Loan: ₹5 - ₹10 Lakh. Tarun Plus: ₹10 - ₹20 Lakh.Pradhan Mantri MUDRA Yojana (PMMY) is the Government of India's flagship scheme for micro and small enterprise financing, launched by PM Modi on 8 April 2015. MUDRA stands for Micro Units Development and Refinance Agency. The mission, in its own words, is to "fund the unfunded" — provide collateral-free institutional credit to small businesses that have historically been excluded from bank lending.
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Active SchemeUpdated: May 2026
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MUDRA Yojana 2026 — Up to ₹20 Lakh Collateral-Free Business Loan (Tarun Plus Category)
Collateral-free business loan up to ₹20 lakh under new Tarun Plus category — four tiers: Shishu, Kishore, Tarun, Tarun Plus
Shishu Loan
Up to ₹50,000
Kishore Loan
₹50K - ₹5 Lakh
Tarun Loan
₹5 - ₹10 Lakh
Tarun Plus
₹10 - ₹20 Lakh
📖What is MUDRA Yojana 2026 — Up to ₹20 Lakh Collateral-Free Business Loan (Tarun Plus Category)?
Pradhan Mantri MUDRA Yojana (PMMY) is the Government of India's flagship scheme for micro and small enterprise financing, launched by PM Modi on 8 April 2015. MUDRA stands for Micro Units Development and Refinance Agency. The mission, in its own words, is to "fund the unfunded" — provide collateral-free institutional credit to small businesses that have historically been excluded from bank lending.
PMMY loans are disbursed through Member Lending Institutions (MLIs): commercial banks, Regional Rural Banks (RRBs), Small Finance Banks, MFIs, and NBFCs. The loans are categorised by business stage. Originally, the scheme had three tiers — Shishu, Kishore, and Tarun — with a maximum loan of ₹10 lakh.
In 2024-25, the government introduced a fourth tier — Tarun Plus — with loan amounts from ₹10 lakh up to ₹20 lakh, specifically for entrepreneurs who have successfully repaid a previous Tarun loan. By 2026, over 49 crore MUDRA loans have been sanctioned cumulatively across all categories. PMMY remains one of the largest small business credit programmes in the world by number of beneficiaries.
✅Eligibility
Business TypeNon-corporate, non-farm small/micro enterprises — manufacturing, trading, services, allied agricultural activities
ApplicantIndian citizen — individual, proprietorship, partnership firm, private limited, public company, or other legal entity
AgeTypically 18 to 65 years (lending bank's discretion)
Credit HistoryNo default with any bank — must not be on RBI defaulter list; CIBIL score considered for higher amounts
Business PlanRequired for Kishore, Tarun, and Tarun Plus categories — Shishu requires only a basic application
CollateralNo collateral required for any MUDRA category up to ₹20 lakh
MUDRA Loan Categories
Shishu
Up to ₹50,000
Kishore
₹50K - ₹5 Lakh
Tarun
₹5L - ₹10 Lakh
Tarun Plus
₹10L - ₹20 Lakh (NEW)
Tarun Plus — the new ₹20 lakh tier
Introduced in Union Budget 2024-25 and fully operational in 2026, Tarun Plus is the latest expansion of PMMY. It provides collateral-free credit from ₹10 lakh up to ₹20 lakh. Eligibility: only entrepreneurs who have previously availed and successfully repaid a Tarun loan can apply for Tarun Plus. This category is designed for high-growth micro-enterprises ready to scale up.
📋What the Four Categories Mean
MUDRA loans are not all the same — each tier is designed for a different stage of the business lifecycle.
Shishu (up to ₹50,000): For first-time entrepreneurs and individuals just starting their business journey — street vendors, small craftspeople, home-based businesses. Banks often disburse Shishu loans in as little as 10 minutes for eligible applicants with a basic business idea.
Kishore (₹50,000 to ₹5 lakh): For businesses in the growth phase needing working capital expansion or additional inventory. Examples: small grocery store wanting to expand to a kirana with cold storage, a tailor adding 2-3 employees and machines.
Tarun (₹5 lakh to ₹10 lakh): For well-established businesses needing larger loans to scale up, increase production capacity, or expand to new markets. Examples: small manufacturer adding a second production line, retail business opening a second outlet.
Tarun Plus (₹10 lakh to ₹20 lakh): Only for entrepreneurs with a successful repayment history under Tarun. This is the new tier for high-performing micro-enterprises ready to make a significant capital investment.
How to Apply for MUDRA Loan
How to Apply for MUDRA Loan
1
Choose Category
Based on your loan need: Shishu / Kishore / Tarun / Tarun Plus
2
Prepare Documents
Aadhaar, PAN, business proof, bank statements, project report
3
Apply Online
JanSamarth or Udyamimitra portal — or visit any bank
4
Loan Disbursed
MUDRA Card issued for easy access to working capital
Who Can Apply for MUDRA Loan
Who Can Apply for MUDRA Loan
You qualify if
- Existing non-corporate small business owner (proprietor, partnership)
- First-time entrepreneur with viable business idea (Shishu)
- Indian citizen aged 18-65 years
- No default history with any bank or financial institution
- Have basic KYC documents — Aadhaar, PAN, address proof
- Business activity is non-farm (Shishu/Kishore/Tarun) or allied agriculture
You won't qualify if
- Primary agricultural activity (crop production) — not covered, see PM Kisan instead
- Listed on RBI defaulter list or had loan write-off
- Corporate body with turnover above MSME limits
- Salaried employee with no business activity
- Trading in restricted items (alcohol, tobacco, gambling)
- Below age 18 or above bank's upper age limit (typically 65)
Documents Required
Documents Required
Aadhaar + PAN Card
Identity and KYC proof
Address Proof
Utility bill (under 2 months) or Aadhaar
Business Proof
Udyam Registration, GST, or Trade License
Bank Statements
Last 6 months (mandatory)
ITR / Financials
Mandatory for Tarun and Tarun Plus
Project Report
Business plan — for Kishore, Tarun, Tarun Plus
49 Crore+
MUDRA loans sanctioned cumulatively (2015-2026)
Across 11 years of operation, PMMY has sanctioned over 49 crore loans through 200+ Member Lending Institutions. This makes MUDRA one of the world's largest small business credit programmes by number of beneficiaries.
MUDRA Categories vs Loan Amounts
MUDRA Categories vs Loan Amounts
TARUN PLUS (NEW) · YOURS
₹10-20 L
post-Tarun repayment only
TARUN
₹5-10 L
established businesses
KISHORE
₹50K-5 L
growth phase
SHISHU
Up to ₹50K
first-time entrepreneurs
💰Interest Rates — How They Work
MUDRA loans do not have a single fixed government-set interest rate. Each lending bank sets its own rate based on its MCLR (Marginal Cost of Funds Based Lending Rate) plus a spread, subject to RBI guidelines.
Typical rates in 2026 range from 9% to 12% per annum, depending on the bank, your category, business risk, and credit history. Shishu loans usually carry slightly lower rates than Tarun and Tarun Plus, since the latter involve larger amounts.
Repayment tenure: 3 to 5 years for most MUDRA loans, depending on the loan type and bank policy. Working capital loans (often disbursed via MUDRA Card) operate as overdraft, with interest charged only on the amount used.
Processing fee: No processing fee for Shishu and Kishore loans (under ₹5 lakh). Tarun and Tarun Plus may attract a nominal processing fee of 0.5-1% of the loan amount, varying by bank.
MUDRA Yojana — Key Milestones
MUDRA Yojana — Key Milestones
8 APR 2015
PMMY launched
PM Modi launches scheme with three categories: Shishu, Kishore, Tarun
2015-2024
₹10 lakh limit
Original Tarun maximum was ₹10 lakh
BUDGET 2024-25
Tarun Plus introduced
Loan limit raised to ₹20 lakh for repeat Tarun borrowers
2026
Fully digital application
JanSamarth and Udyamimitra portals enable paperless applications
2026
49 crore+ loans sanctioned
Cumulative since 2015 launch
No agent can guarantee MUDRA loan approval
MUDRA loans are sanctioned by banks based on your business viability and credit profile. There is no fee to apply at any bank or via the JanSamarth portal. If anyone — agent, middleman, or "DSA" — promises guaranteed approval for an upfront fee, it is a scam. Approach only the bank directly, or use the official JanSamarth (jansamarth.in) or Udyamimitra (udyamimitra.in) portals.
📝How to Apply
1
Choose your MUDRA category
Identify which tier fits your loan need: Shishu (up to ₹50,000) for new businesses, Kishore (₹50K-5L) for growth-stage, Tarun (₹5-10L) for established businesses, or Tarun Plus (₹10-20L) — but only if you have already repaid a Tarun loan.
2
Prepare your documents
Keep ready: Aadhaar, PAN, address proof (utility bill under 2 months), business proof (Udyam, GST, or Trade License), last 6 months bank statements, ITR (mandatory for Tarun/Tarun Plus), 2 passport photos, and a project report / business plan (for Kishore and above).
3
Apply online or at a bank
Online: visit jansamarth.in or udyamimitra.in, choose "Business Activity Loan," select your category, fill the form, upload documents. Offline: visit any commercial bank, RRB, Small Finance Bank, or NBFC that is an MLI under PMMY — ask for MUDRA loan application.
4
Bank evaluation & disbursement
The bank reviews your business viability, CIBIL score (for higher amounts), and project report. On approval, the loan is disbursed to your bank account. For working capital loans, you receive a MUDRA Card (RuPay debit card) for easy access. Shishu loans can be approved in 10 minutes for eligible applicants.
ℹ️MUDRA Tarun Plus loan up to ₹20 lakh is available only for entrepreneurs who have successfully repaid a previous Tarun loan. No collateral required for any MUDRA category. Apply free at JanSamarth or Udyamimitra portal.
📅Important Dates & Schedule
Scheme Launched8 April 2015 (PM Modi)
Tarun Plus IntroducedUnion Budget 2024-25 — fully operational 2026
Maximum Loan₹20 lakh (Tarun Plus, post-Tarun repayment)
Total Loans Sanctioned49 crore+ cumulative (2015-2026)
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❓Frequently Asked Questions
MUDRA — mudra.org.in
www.mudra.org.in/
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📋 Official Sources & Verification
Information verified against official government portals and gazette notifications. Read our editorial process.
AK
Researched & verified from official sources
Last reviewed
May 2026
May 2026