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MUDRA loan is a loan scheme for MSMEs under the PMMY scheme introduced by the Government of India. MSMEs can get loans ranging from ₹50000 to ₹10 lakh under the scheme. MUDRA loan eligibility depends on the main revenue generating activity of the business.

Business Loans

MUDRA loan eligibility

If you are trying to apply for the MUDRA loan you will need to satisfy all the eligibility criteria set up by the loan authority. Let us have a detailed look at all the eligibility for MUDRA loan scheme:

  • Age of the applicant: The applicant must not be a minor. The age limit for MUDRA loan is from 18 to 65.
  • Citizenship: The applicant must be an Indian citizen
  • Credit requirement: Credit requirements should be ₹10 lakh and below
  • Size of entities: The companies should be officially classified as MSME with valid MSME registration
  • Loan defaults: The applicant must have no prior loan defaults
  • Type of businesses: All non-corporate and non-farm enterprises including startups, wholesalers and retailers can apply for the loan. Here is a list of some of the business activities eligible for the MUDRA loan:
  • Artisans
  • Shopkeepers
  • Fruit and vegetable vendors
  • Engineering businesses
  • Services companies
  • Manufacturing businesses

Mudra loan eligibility cibil score

Generally, the MUDRA loan eligibility CIBIL score that a business should possess ranges from 650 – 700. However, banks don’t consider CIBIL score as a strict determinant of eligibility.

Documents required for MUDRA loans

To apply for MUDRA loans these are the documents required:

  • Udyam registration certificate
  • Shop and establishment registration certificate
  • Identity proof including Aadhar card and PAN card
  • Income tax returns of the past six months
  • Audited balance sheets and profit and loss accounts of the company

Also read: Is Udyam and MSME registration the same?

How to apply for a MUDRA loan?

Government of India invited financial institutions across the country to participate in MSME lending under the scheme. Many MFIs, NBFCs, public and private sector banks are a part of this loan scheme. Simply approach your nearest bank branch to check if they are extending the loan. You can contact them via phone as well.

Types of loans extended under MUDRA loans

  • Business loan for vendors, traders, shopkeepers and other service sector activities
  • Working capital loan through MUDRA cards
  • Equipment finance for micro units
  • Transport vehicle loans for vehicles used for commercial purposes
  • Loans for agri-allied non-farm income generating activities, for example, pisciculture. bee keeping, poultry farming, etc.
  • Loan for tractors, tillers and two wheelers used for commercial purposes

Which banks are eligible for issuing MUDRA loan?

Under the PMMY scheme, various financial institutions have been authorised to extend loans to MSMEs. Products like SBI e-Mudra loan have become very popular among businesses that are SBI account holders.  Here is a list of banks that offer MUDRA loans for MSMEs:

Type of financial institution Name of the institution
Public sector banks SBI
Bank of India
Bank of Maharashtra
Central Bank
Indian Overseas Bank
Punjab National Bank
Private sector banks Federal Bank
The Nainital Bank Limited
Karnataka Bank
Kotak Mahindra Bank
ICICI Bank
Axis Bank
State co-operative banks Andaman & Nicobar State Cooperative Bank Ltd
Regional rural banks Kerala Gramin Bank
Manipur Rural Bank
Karnataka Gramin Bank
Baroda UP Bank
Micro Finance Institutions Agora Microfinance India Ltd
Village Financial Services Pvt Ltd
Muthoot Microfin Ltd
M Power Microfinance Pvt Ltd
Satin Creditcare Network Limited –
Samasta Microfinance Limited
Non Banking Financial Companies Magma Fincorp Limited
Shriram Transport Finance Co.
L&T Finance Limited
Ess Kay Fincorp Limited
Loantap
Small Finance Banks Equitas Small Finance Bank
ESAF Small Finance Bank
Ujjivan Small Finance Bank
Jana Small Finance Bank Limited

There are many more banks that extend MUDRA loans to small businesses. These are collateral free loans designed to provide easy access to finance to the MSME sector.

For a full list of banks offering MUDRA loans visit https://www.mudra.org.in/, navigate to offerings and click on ‘Shortlisted for partnering on MUDRA’.

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