A Mudra loan is a collateral-free loan of up to ₹20 lakh to a non-farm micro enterprise, made by a bank, NBFC or microfinance institution and guaranteed under the Credit Guarantee Fund for Micro Units. It comes in four sizes — Shishu up to ₹50,000, Kishore to ₹5 lakh, Tarun to ₹10 lakh, and Tarun Plus to ₹20 lakh for borrowers who have repaid a Tarun loan.
There is no subsidy: the interest is the lender's own rate. The benefit is that no collateral or third-party guarantee is asked for, and small amounts are sanctioned quickly — a Shishu loan often within days.
The Tarun Plus band (₹10–20 lakh) was added in October 2024 and is only open to borrowers with a repaid Tarun loan. Apply at any bank branch, through the JanSamarth portal, or via an NBFC or MFI; the lender will want KYC, business proof, bank statements and, for larger amounts, a simple project report.
Reviewed to the law in force in FY 2026-27. General information, not advice — confirm the position for your facts before acting.
