Mudra loan project report — Shishu, Kishore, Tarun and Tarun Plus explained
Pradhan Mantri Mudra Yojana (PMMY) finances small, non-farm, income-generating businesses through banks, NBFCs and micro-finance institutions — collateral-free, with guarantee cover. For anything above the Shishu level the branch will ask for a project report. This page sets out the limits, who qualifies, what the bank actually looks for, and gives you a free tool that produces the report in bank format.
Make a free Mudra project report (up to ₹10 lakh) → Tarun Plus / above ₹10 lakh — detailed DPR →
The four Mudra categories
| Category | Loan amount | Typical borrower | Report expected |
|---|---|---|---|
| Shishu | up to ₹50,000 | Street vendor, tailor, small kirana, home-based unit | Simple activity profile; many banks skip a formal report |
| Kishore | above ₹50,000 to ₹5 lakh | Shop expansion, small machinery, vehicle for business, service centre | Short bank-format project report |
| Tarun | above ₹5 lakh to ₹10 lakh | Small manufacturing, food processing, clinic, coaching centre, transport | Full project report with projections and DSCR |
| Tarun Plus | above ₹10 lakh to ₹20 lakh | Borrowers who have availed and repaid a Tarun loan | Detailed project report (DPR) |
Limits as per PMMY guidelines in force (Tarun Plus introduced from October 2024). Confirm current terms with your bank or on mudra.org.in.
Who is eligible
- Indian citizens with a business plan for a non-farm income-generating activity — manufacturing, trading or services.
- Allied agriculture activities are covered: dairy, poultry, fishery, beekeeping, agri-clinics, food processing, and so on (farming itself is not).
- Proprietors, partnerships, small companies and self-help groups.
- No defaulter history with any bank; a clean credit report helps for Kishore and above.
What the bank checks in a Mudra project report
- Purpose and cost. Exactly what the money buys — machinery, stock, vehicle, shop fit-out — with quotations. Working-capital need should follow from the stock and credit cycle, not be a round number.
- Own contribution. Mudra does not prescribe a fixed margin, but banks generally expect 10–25% of the project cost from you for Kishore and above.
- Sales that fit the location. A ₹10 lakh turnover claim for a shop in a village of 2,000 people will be questioned. Build sales from footfall × ticket size or units × price.
- Repayment capacity. Monthly cash surplus comfortably above the EMI; DSCR around 1.5 on average and never below 1.25. Tenor usually 3–5 years (up to 7 for term loans), moratorium 3–6 months.
- Existing business proof for expansion cases — shop licence, GST or Udyam registration, bank statements showing turnover.
Documents checklist
- Aadhaar, PAN, two photographs, address proof
- Business proof — Udyam registration, shop & establishment licence, GST (if applicable)
- Quotations for machinery / vehicle / stock to be purchased
- Project report (bank format) — compulsory for Kishore, Tarun, Tarun Plus
- Six to twelve months' bank statements; last ITRs if available
- Proof of premises (ownership or rent agreement)
- Caste certificate if applying under a special category for any state-linked benefit
How to apply
- Prepare the project report and quotations first.
- Apply at your bank branch (public sector banks, private banks, RRBs, small finance banks, NBFCs and MFIs all lend under PMMY), or online through the Udyamimitra / Jan Samarth portals, which route the application to lenders.
- The bank appraises, may visit the premises, and sanctions. Kishore and above are usually sanctioned as a term loan plus, where needed, a Mudra card (working-capital overdraft).
- No collateral; the bank takes CGFMU guarantee cover. Processing charges are nil for Shishu at most public sector banks and modest for higher categories.
Mudra or PMEGP — which one?
If you are starting a new unit and are eligible, PMEGP gives a 15–35% subsidy that Mudra does not; the trade-off is a longer process (EDP training, task-force scrutiny). Mudra is faster, open to existing businesses and to trading, and works well for working capital and small expansions. Many small traders start with Mudra and move to a CGTMSE-covered term loan as they grow.
Frequently asked questions
What are the Mudra loan limits?
Shishu up to ₹50,000; Kishore up to ₹5 lakh; Tarun up to ₹10 lakh; Tarun Plus up to ₹20 lakh (for borrowers who repaid a Tarun loan).
Is a project report needed?
Usually not for Shishu; normally required for Kishore, Tarun and Tarun Plus.
Is collateral required?
No — Mudra loans are collateral-free with CGFMU guarantee cover.
Who can take a Mudra loan?
Non-corporate, non-farm micro and small enterprises, including allied-agriculture activities.
Is there a subsidy?
No subsidy under Mudra itself. Consider PMEGP for a new unit if you want a subsidy.
What interest rate applies?
Set by each lender (typically linked to the bank's external benchmark rate plus a spread); there is no fixed Mudra rate. Compare two or three banks.
Make the report now
Project report up to ₹10 lakh (Kishore / Tarun) → Detailed DPR above ₹10 lakh (Tarun Plus) →
Other free tools on loansinfo.in
Written by Avani Corporation, Indore, from bank-side appraisal experience. Scheme parameters change; verify the latest with your bank or on mudra.org.in. The sanctioning bank's assessment is final. Help on WhatsApp: 9183020110.