If you run a small business in India — a shop, a service unit, a small manufacturing operation, or anything in between — and you need a loan of up to ₹20 lakh without pledging your property or assets, the Pradhan Mantri Mudra Yojana (PMMY) is the scheme most likely to work for you. Since it launched in April 2015, over 57.79 crore loans worth more than ₹40 lakh crore have been sanctioned under this scheme, making it one of the largest small business lending programs in the world.

What most applicants don’t know is that their chances of getting approved — and the interest rate they’re offered — depend heavily on one document: the project report.

 At Sharda Associates, we prepare CA-certified project reports specifically for Mudra loan applications, covering all categories including the new Tarun Plus. A complete, bank-ready report is delivered within 24 to 48 hours at ₹2,999. You don’t need to understand financial projections or banking formats — we handle all of that, so you can focus on your business. Call +91 89899 77769 to get started.

Get Your Project Report → 

What Is the Mudra Loan Scheme

The Pradhan Mantri Mudra Yojana (PMMY) is a Government of India initiative under which commercial banks, regional rural banks, small finance banks, microfinance institutions, and NBFCs provide collateral-free loans to non-corporate, non-farm small and micro enterprises. The scheme covers manufacturing, trading, and service businesses, as well as allied agricultural activities like dairy, poultry, beekeeping, food processing, and agri-clinics.

The word MUDRA stands for Micro Units Development and Refinance Agency — a government body that provides refinancing support to lenders so they can extend credit to micro businesses at affordable rates.

 Get Your CMA Report → 

Mudra Loan Categories 

The scheme is divided into four categories based on the stage of your business and the loan amount you need:

Important 2026 Update: The Tarun Plus category was introduced in October 2024, following Finance Minister Nirmala Sitharaman’s announcement in Union Budget 2024-25. It effectively doubles the maximum Mudra loan ceiling to ₹20 lakh, but is specifically available only to entrepreneurs who have previously taken and successfully repaid a Tarun category loan. These loans are covered under the Credit Guarantee Fund for Micro Units (CGFMU) — no collateral required.

Mudra Loan Interest Rate — Category Wise

<cite index=”42-1″>Mudra loan interest rates in 2026 are not fixed by the government — each bank or lending institution sets its own rate</cite> based on your credit profile, loan category, and market conditions. Here are the typical ranges:

Public sector banks like SBI, PNB, Bank of Baroda, and Canara Bank consistently offer the lowest Mudra loan rates. Private banks process faster but charge 1-2% more. <cite index=”47-1″>Women entrepreneurs may receive additional facilities including interest reduction on their loan—MUDRA extends a reduction of 25 basis points in its refinance rates to MFIs and NBFCs providing loans to women entrepreneurs. </cite>

Mudra Loan Eligibility 

Mudra loans are open to a wide range of applicants:

• Indian citizens aged 18 to 65 years
• Individuals, sole proprietors, partnership firms, LLPs, and private limited companies
• Businesses engaged in manufacturing, trading, services, or allied agricultural activities
• No default history with any bank or financial institution
• For Kishor and Tarun: satisfactory credit history preferred (CIBIL 650+)
• For Tarun Plus: must have successfully repaid a previous Tarun category Mudra loan, with Udyam Registration now strongly recommended

Businesses that are not eligible include those involved in crop farming directly, tobacco, alcohol, and businesses that have already availed of other government subsidies for the same project.

Documents Required for Mudra Loan

For Shishu (up to ₹50,000):

• Aadhaar Card and PAN Card
• Address proof
• Passport size photographs
• Business details (what you do, where you operate)

For Kishor and Tarun (₹50,001 to ₹10 lakh):

• All Shishu documents, plus
• Bank statements for last 6 to 12 months
• Udyam Registration Certificate (strongly recommended)
• Trade License or Shop Establishment Certificate
• A business plan or project report detailing your loan requirement and projected income

For Tarun Plus (₹10 lakh to ₹20 lakh):

• All above documents, plus
• Proof of previous Tarun loan repayment
• GST registration and ITR where applicable
• <cite index=”48-1″>A Project Report detailing the estimated costs (machinery, inventory, interiors) and projected income</cite>
• Udyam registration is mandatory in most banks

 Get Your Detailed Project Report →  

Why a Project Report Matters More Than Most Applicants Realize

For Shishu loans, a simple business plan is usually enough. But for Kishor, Tarun, and Tarun Plus, the project report is what actually decides whether your application moves forward or stalls at bank appraisal.

Banks don’t approve ideas — they approve numbers and financial feasibility. Your project report needs to clearly show how much you need, what you’ll use it for, how your business will generate enough revenue to comfortably repay the EMI, and what your working capital cycle looks like. A vague or unrealistic report is the single biggest reason Mudra loan applications get rejected or sent back for revision at the bank stage, even when the applicant and business are genuinely eligible.

A CA-certified project report with realistic financial projections, properly calculated DSCR, and consistent financial statements changes this entirely. It signals to the bank that the numbers have been verified by a professional—and that the application is worth processing smoothly rather than questioning at every step.

How Much Time Does Mudra Loan Approval Take

• <cite index=”51-1″>Shishu loans can be approved in 7 to 10 working days since documentation is minimal. Kishor loans typically take 2 to 3 weeks, and Tarun loans can take 3 to 4 weeks due to the larger amounts and more detailed scrutiny.</cite>
• Tarun Plus loans involve more verification and may take 4 to 6 weeks depending on the bank

Having your project report ready before you approach the bank is the single step that speeds up the Kishor, Tarun, and Tarun Plus process most meaningfully.

What Can Mudra Loan Be Used For

• Working capital for day-to-day business operations
• Purchase of machinery and equipment
• Business expansion and setup of new units
• Purchase of commercial vehicles for transport-based businesses
• Stock and inventory purchase for trading businesses
• Shop fit-out, interiors, and display systems for retail businesses
• Equipment for service-based businesses (salon, repair shops, tailoring units)
• Allied agricultural activities like dairy setup, poultry units, food processing equipment

Mudra loans cannot be used for crop farming, personal expenses, loan repayment, or speculative activities.

Mudra Card — What It Is: A MUDRA Card is a RuPay debit card issued against your Mudra working capital loan account. It lets you withdraw funds as and when your business needs them, rather than taking the entire loan amount upfront. You pay interest only on the amount actually withdrawn — making it a flexible, cost-efficient facility for businesses with variable daily cash requirements.

How Sharda Associates Helps With Your Mudra Loan Project Report

1. Share your business type and loan category over a call or WhatsApp — no technical knowledge required
2. A CA reviews your specific business and structures the project report with realistic revenue projections and working capital calculations
3. DSCR and financial statements are prepared in the exact format banks expect for Mudra appraisal
4. CA certified, bank-ready PDF delivered within 24 to 48 hours, ready for submission with your Mudra application

No office visits. No confusing paperwork. No back-and-forth trying to figure out what the bank wants — we handle that part completely.

Conclusion

The Mudra Loan Scheme in 2026 is more accessible than it has ever been — with four categories now covering loan needs from ₹50,000 all the way to ₹20 lakh under Tarun Plus, all without collateral. The scheme has helped over 57 crore borrowers across India, nearly two-thirds of them women, access formal credit for the first time. 

But the application that moves smoothly through bank appraisal is almost always the one backed by a properly structured project report—not just a filled-in form. Getting that one document right, with realistic numbers that hold up to scrutiny, is what separates an approval in 3 weeks from an application that sits in limbo for months. That’s exactly what Sharda Associates prepares for you, quickly and without the stress of figuring out banking requirements on your own. 📞 Call Now: +91 89899 77769  Get Your Project Report →  

Frequently Asked Questions

1. What is the Mudra Loan Scheme and who can apply?

 The Pradhan Mantri Mudra Yojana (PMMY) provides collateral-free loans up to ₹20 lakh to non-corporate, non-farm small and micro enterprises. Any Indian citizen aged 18 to 65 running a manufacturing, trading, or service business can apply.

2. What are the four categories of Mudra loan ?

 Shishu (up to ₹50,000), Kishor (₹50,001 to ₹5 lakh), Tarun (₹5 lakh to ₹10 lakh), and Tarun Plus (₹10 lakh to ₹20 lakh) — introduced in October 2024 for borrowers with a clean Tarun repayment record.

3. What is the Mudra loan interest rate ?

 Interest rates are not fixed by the government. Shishu loans typically range from 10% to 12%, Kishor from 11% to 15%, and Tarun from 12% to 16% per annum. Public sector banks offer the lowest rates; women entrepreneurs may receive additional concessions.

4. Is collateral required for a Mudra loan?

 No. Mudra loans are completely collateral-free. No property, gold, or guarantor is required. The government provides credit guarantee through CGFMU, encouraging lenders to extend unsecured credit to micro-entrepreneurs.

5. Is a project report required for a Mudra loan?

 For Shishu loans, a simple business plan may suffice. For Kishor, Tarun, and Tarun Plus, a proper project report detailing business activity, project cost, and financial projections is expected and significantly improves approval chances.

6. Who is eligible for Tarun Plus Mudra loan?

 Only entrepreneurs who have previously taken and successfully repaid a Tarun category Mudra loan (up to ₹10 lakh) are eligible. Udyam Registration is strongly recommended and mandatory at most banks for Tarun Plus applications.

7. How long does Mudra loan approval take?

 Shishu loans: 7 to 10 working days. Kishor: 2 to 3 weeks. Tarun: 3 to 4 weeks. Tarun Plus: 4 to 6 weeks. Having a complete project report ready before approaching the bank speeds up the process for Kishor, Tarun, and Tarun Plus significantly.

8. What is a MUDRA Card?

A RuPay debit card linked to your Mudra working capital loan account. It lets you withdraw funds as needed and pay interest only on the amount used — ideal for businesses with variable daily cash requirements.