Reviewed by the CreditCares advisory desk · 13 years in business finance · Last updated 10 July 2026
PM Mudra Yojana — collateral-free loans up to ₹20 lakh.
A Government of India scheme for non-farm micro and small enterprises, delivered through banks, NBFCs and MFIs. Four tiers — Shishu, Kishore, Tarun and the new Tarun Plus — matched to your stage of growth.
One tier for every stage of your business
First-time entrepreneurs, street vendors and artisans starting out.
Businesses past the startup stage needing expansion capital.
Established businesses scaling operations significantly.
Only for borrowers who have fully repaid a Tarun loan — rewarding repayment discipline.
Who is eligible?
- Indian citizen aged 18–65 years
- Non-farm, non-corporate small business — manufacturing, trading or services
- Income-generating business purpose only
- Credit requirement below ₹20 lakh (₹10 lakh for first-time Tarun applicants)
- No existing loan default with any bank or institution
Why Mudra loans get rejected
- CIBIL score below 650 — most banks filter here in practice
- A vague, one-line business plan with no cash-flow numbers
- Mismatched addresses across KYC documents
- Asking for more than your turnover can justify
- Applying to multiple banks at once — hard enquiries stack up
"Collateral-free" means no asset pledge — it does not mean credit-check-free. The fix is preparation, not persistence.
How to apply in 2026
Outgrown ₹20 lakh? If your business needs a term loan, cash credit facility or project finance between ₹1 Crore and ₹100 Crore, we structure it across 80+ banks & NBFCs.
Talk to a loan advisor