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Loan Finance

PMMY MUDRA Shishu

Collateral-free business loan up to ₹50,000

Maximum benefit
₹50K
Typical processing
7–14 working days from complete application submission
Apply on official portal

About this scheme

Pradhan Mantri Mudra Yojana (PMMY) — Shishu category — provides collateral-free institutional loans up to Rs. 50,000 to micro-enterprises that are either starting up or in early stages. Loans are extended by Public Sector Banks, Regional Rural Banks, Co-operative Banks, Private Sector Banks, NBFCs, MFIs, and Small Finance Banks. No processing fee is charged for Shishu loans by most lenders.

What you get

  • Loan amount: Up to Rs. 50,000
  • No collateral or third-party guarantee required
  • Interest rate: 8.0%–12.0% per annum (varies by lender; floats with bank's repo-linked rate)
  • Repayment tenure: 3–5 years with moratorium option
  • Zero processing fee at most Public Sector Banks
  • MUDRA card (RuPay debit card) issued for working-capital portion — withdraw as needed
  • Credit Guarantee Fund for Micro Units (CGFMU) cover — lender protected if borrower defaults

Who qualifies

Any Indian citizen who has a business plan for a non-farm income-generating activity — such as manufacturing, processing, trading or services — and whose credit need is up to Rs. 50,000. The enterprise must be a micro-unit (proprietorship, partnership, or individual business). The applicant should not be a defaulter to any bank or financial institution. There is no minimum income or business turnover requirement, which makes Shishu the entry-level tier for first-time entrepreneurs.

All industries qualify (no NIC restriction).

All business types qualify.

Available across India (central scheme).

How to apply

  1. 1Identify your nearest participating lender (any PSB, RRB, private bank, NBFC, MFI) via mudra.org.in or Jan Samarth portal
  2. 2Fill the standardised Mudra application form (online at jansamarth.in or in-branch)
  3. 3Submit identity proof, business address proof, quotation for items to be purchased, and last 6 months bank statement
  4. 4Lender does basic KYC + verifies business activity; some lenders may require an in-person interview
  5. 5Loan sanction typically issued within 7–14 working days
  6. 6Funds disbursed to applicant's bank account; working-capital portion accessible via MUDRA RuPay card

Key terms and conditions

  • No collateral or guarantor required
  • Interest rate floats with the lender's MCLR/repo-linked rate
  • Repayment in EMIs after the moratorium period
  • Pre-payment allowed without penalty for floating-rate loans
  • Credit Information Bureau (CIBIL) check is mandatory — minimum acceptable score varies by lender (typically 650+)

What disqualifies you

  • Cannot be used for agricultural activities (crop loans go through Kisan Credit Card)
  • Not available for personal consumption, weddings, or non-business expenses
  • Existing defaulters to any bank/NBFC are ineligible
  • Loans above Rs. 50,000 fall under Kishore or Tarun — apply under the correct tier
  • Each beneficiary can hold only one active Mudra loan at a time

Documents typically required

  • Identity proof (Aadhaar/PAN)
  • Business address proof
  • Quotation of items to be purchased
  • Last 6 months bank statement

Frequently asked questions

Q. Can I apply online?
Yes — via the Jan Samarth portal (jansamarth.in). However, most lenders require the final documentation step in-branch.
Q. Is a CIBIL score required?
Yes. Each lender has its own minimum threshold but typically 650+ is required. First-time borrowers with no credit history can still be considered.
Q. Can a new business with no existing operations apply?
Yes — Shishu is designed exactly for startup and early-stage micro-units. You will need a clear business plan and quotation for the items to be purchased.
Q. What if my bank rejects my application?
You can approach another participating lender. There is no central pool — each lender makes its own credit decision.

The content above is compiled from public information published by the scheme authority. Eligibility, benefits, and procedures are subject to change. Confirm details directly with the official portal before applying. BharatSeal does not process scheme applications.