Pradhan Mantri MUDRA Yojana (PMMY) — Collateral-Free Loans up to ₹20 Lakh, and How to Apply on Jan Samarth

Pradhan Mantri MUDRA Yojana, launched in April 2015, gives collateral-free institutional credit to non-corporate, non-farm micro enterprises — shops, traders, service providers, small manufacturers, food vendors, repair workshops, transport operators — and to allied agricultural activities such as dairy, poultry and beekeeping. Loans are given by banks, NBFCs and microfinance institutions and refinanced by MUDRA (Micro Units Development and Refinance Agency); they carry no collateral or third-party guarantee because they are covered by the Credit Guarantee Fund for Micro Units.

Interest is set by the lender under RBI guidelines; repayment runs up to five to seven years depending on the purpose, with a moratorium where the bank allows. Term loans, working capital limits and the MUDRA card (an overdraft debit card) are all available.

Jan Samarth (jansamarth.gov.in) is the national portal for credit-linked government schemes — a dozen or more schemes across education, agriculture, business and livelihood loans, Mudra among them. The borrower checks eligibility, chooses the scheme and the bank, and the portal verifies details digitally — Aadhaar, PAN, Udyam, GST, ITR and bank statement — and issues an in-principle sanction, often within minutes, if the applicant's credit score, financials and registrations are in order. The chosen bank then completes documentation and disbursal.

1. 1Step 1 — Register on Jan Samarth with mobile and Aadhaar; complete the eligibility check for the business loan category and pick Mudra.
2. 2Step 2 — Enter business details, loan amount and purpose; upload or e-fetch Udyam, PAN, GST, ITR and bank statements.
3. 3Step 3 — Select the lending bank and branch; the portal issues the in-principle sanction if the profile qualifies.
4. 4Step 4 — Complete the bank's documentation — project report or quotation, KYC, photographs — and receive disbursal.

• •No Udyam registration or no ITR — both are checked digitally on Jan Samarth.
• •A poor credit score or an overdue loan in the household.
• •A business that cannot show turnover in the bank statement.
• •Asking for Tarun Plus without a repaid Tarun loan.
• •Applying to the wrong scheme: a project above ₹20 lakh belongs in PMEGP, CGTMSE-backed lending or a state scheme.