MUDRA Loan Subsidy: Percentage, Amount & How to Apply Online Starting or expanding a small business in India often fails not because of a bad idea, but because of lack of affordable finance. To solve this problem, the Government of India launched the Pradhan Mantri MUDRA Yojana (PMMY)—a flagship scheme that provides collateral-free business loans to micro and small entrepreneurs. MUDRA loan subsidy percentage, amount, eligibility, online application process, and how a proper project report plays a key role in fast bank approval.

What is MUDRA Loan Scheme?

MUDRA (Micro Units Development and Refinance Agency) is a government initiative under the Ministry of Finance to support non-corporate, non-farm small businesses.

The scheme helps:

  • First-time entrepreneurs
  • Small traders & shop owners
  • Manufacturers & service providers
  • Women-led and MSME businesses

MUDRA loans are provided through public sector banks, private banks, NBFCs, and MFIs.

Is There Any Subsidy in MUDRA Loan?

However, MUDRA loans provide indirect financial benefits, such as:

  • Lower interest rates
  • No collateral requirement
  • Access to interest subsidy under specific state or category-based schemes
  • Credit guarantee coverage

Many borrowers confuse PMEGP subsidy with MUDRA loan. In reality:

  • PMEGP = Loan + Subsidy
  • MUDRA = Easy collateral-free loan (no direct subsidy)

Still, MUDRA remains one of the most powerful funding tools for small businesses.

Types of MUDRA Loans & Amount

MUDRA loans are divided into three categories based on business stage:

1. Shishu Loan

2. Kishor Loan

  • Loan amount: ₹50,001 to ₹5 lakh
  • Best for: Growing businesses
  • Interest rate: 10%–14%

3. Tarun Loan

  • Loan amount: ₹5 lakh to ₹10 lakh
  • Best for: Expansion & scaling
  • Interest rate: 11%–16%

Interest rates vary depending on bank, credit profile, and project viability.

MUDRA Loan Subsidy: What Financial Benefits Do You Actually Get?

Although there is no direct subsidy, borrowers enjoy these benefits:

In some states, additional interest subsidy schemes are linked with MUDRA loans, which experts like Sharda Associates can help you identify and combine legally.

Eligibility Criteria for MUDRA Loan

You are eligible if:

  • You are an Indian citizen
  • Your business falls under manufacturing, trading, or services
  • You are a sole proprietor, partnership, LLP, or small company
  • You do not require collateral
  • You have a viable business plan

Both new and existing businesses can apply.

Documents Required for MUDRA Loan

Banks usually ask for:

  • Aadhaar Card & PAN Card
  • Business address proof
  • Bank statements (last 6 months)
  • Udyam Registration (MSME)
  • Quotation of machinery / equipment
  • Project Report / Business Plan

 Project Report is the most critical document. Weak project reports are the #1 reason for MUDRA loan rejection.

How to Apply for MUDRA Loan Online (Step-by-Step)

 1: Choose the Right Bank

Apply through:

  • PSU Banks (SBI, PNB, BOI)
  • Private Banks
  • NBFCs

2: Prepare a Bankable Project Report

Your DPR should include:

  • Business overview
  • Market demand analysis
  • Cost of project
  • Working capital requirement
  • Profit & cash flow projections
  • Repayment capability

3: Online/Branch Application

 4: Bank Evaluation

  • Credit appraisal
  • Feasibility check
  • Field verification (in some cases)

 5: Loan Sanction & Disbursement

If approved, loan is disbursed directly to your account.

Why Project Reports Matter for MUDRA Loan Approval

Banks do not approve loans based on ideas—they approve numbers and feasibility.

A professional project report:

  • Increases approval chances
  • Helps negotiate better interest rates
  • Builds banker confidence
  • Reduces processing time

Sharda Associates, as a CA-led consultancy, prepares bank-approved project reports accepted by all major banks.

Why Contact Sharda Associates for a MUDRA Loan?

 CA-verified project reports
  Loan planning as per bank norms
  End-to-end MUDRA loan support
  MSME & Udyam registration help
  Faster approval, fewer rejections

Whether you need Shishu, Kishor, or Tarun MUDRA loan, expert guidance saves time, money, and stress.

Conclusion

While MUDRA loans do not offer a direct subsidy, they remain one of the most powerful government-backed funding options for micro and small businesses in India. With collateral-free loans up to ₹10 lakh, flexible repayment, and wide bank coverage, MUDRA is ideal for startups and growing MSMEs. The key to success lies in choosing the right loan category and submitting a strong, bankable project report. With professional support from Sharda Associates, entrepreneurs can significantly improve approval chances and secure funds faster, enabling sustainable business growth in 2026 and beyond.You can contact us at +91 8989977769 for any query or if you require our services to prepare a project report or a bank loan.

FAQs

1. Is there any subsidy in the MUDRA loan?

No direct subsidy is provided under MUDRA. However, borrowers benefit from lower interest rates, collateral-free loans, and sometimes state-level interest subsidy schemes.

2. Can I get a PMEGP subsidy with a MUDRA loan?

No. PMEGP and MUDRA are separate schemes. PMEGP offers subsidy; MUDRA focuses on easy credit access.

3. What is the maximum loan amount under MUDRA?

You can get up to ₹10 lakh under the Tarun category.

4. Is a project report mandatory for a MUDRA loan?

Yes. A professional project report is critical for bank approval, especially for Kishor and Tarun loans.

5. How long does MUDRA loan approval take?

With proper documents and a strong DPR, approval usually takes 7–21 working days.