Mudra loan up to ₹20 lakh: Who can get it, eligibility & loan categories. How to apply

Prime Minister Narendra Modi launched several major schemes during his first term, many of them aimed at helping people become self-reliant through loans. One such scheme is the Pradhan Mantri Mudra Yojana, under which beneficiaries can get loans of up to ₹20 lakh at affordable interest rates.

MUDRA Loan Categories and Eligibility Limits

The scheme has been divided into four categories: Shishu, Kishor, Tarun and Tarun Plus. Shishu covers loans of up to ₹50,000. Kishor covers loans above ₹50,000 and up to ₹5 lakh. Tarun covers loans above ₹5 lakh and up to ₹10 lakh. Tarun Plus covers loans above ₹10 lakh and up to ₹20 lakh.

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The government launched the Tarun Plus category in 2024. Under this category, beneficiaries can avail loans between ₹10 lakh and ₹20 lakh. Loans under all four categories are available without collateral, though this does not mean they are given without scrutiny.

Banks or the concerned lender take a decision on the basis of the applicant's eligibility, business needs, documents and repayment capacity. The interest rate is also decided by the lender in line with the applicable RBI rules.

What Can You Use the Loan For?

Mudra loans can be used for several kinds of small businesses. These include shops, service centres, small manufacturing units, trade, transport, dairy, poultry and agriculture-linked activities such as beekeeping. The loan can also be used for business needs such as working capital and term finance.

Mudra loans can be taken through banks, regional rural banks, small finance banks, NBFCs and microfinance institutions. The government has also increased the use of digital channels to make the application process easier.

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How Much Mudra Credit Reached Women and Minorities?

As of March 2026, loans worth ₹9.02 lakh crore were disbursed to women under the Shishu category. Under Kishor, loans worth ₹6.22 lakh crore were disbursed, while under Tarun, loans worth ₹1.09 lakh crore were disbursed to women.

Among minority borrowers, ₹1.33 lakh crore was disbursed under Shishu, ₹1.54 lakh crore under Kishor and ₹0.62 lakh crore under Tarun. The scheme offers collateral-free loans across four categories and covers a range of small business and agriculture-linked activities.