What is the Criteria of Eligibility for Mudra Loan?

The Mudra loan scheme was established under the Pradhan Mantri Mudra Yojana to help small businesses gain access to some much needed funding. Considering the fact that micro, small, and medium enterprises typically struggle to sustain their businesses due to lack of funds, the Indian government has made things infinitely easier for them.

If you’re a small business owner or plan on starting your own enterprise any time in the near future, here’s what you need to know about eligibility for Mudra loan. However, before we actually take a look at the eligibility criteria, let’s quickly take a look at the different types of Mudra loans available and see how it can help businesses.

What are the different types of Mudra loans?

The loan scheme can be classified into three types – Shishu, Kishore, and Tarun. These categories determine the amount of loan you’re eligible to apply for. Here’s some more information.

  1. Shishu loan: Under this loan type, you can avail a maximum of ₹50,000 as a loan for a maximum tenor of up to 5 years. However, it is available only to individuals and enterprises that are just starting out on their journey.
  2. Kishore loan: This loan is available for enterprises who have already set up their business and are looking to expand. Under this category, you can avail a loan starting from ₹50,000 to ₹5 lakhs.
  3. Tarun loan: This category is available only for enterprises that are well-established and have a track record of operations. Under this loan type, you can avail loans starting from ₹5 lakhs to around ₹10 lakhs.

What is the eligibility criteria for Mudra loans?

Now that you know all about Mudra loans, let’s take a look at the eligibility criteria.

  1. The individuals applying for the loan should be above 18 years of age, but below 65 years of age.
  2. The individual or enterprise applying for the loan should not have defaulted on any loan repayments.
  3. The individual or enterprise applying for the loan should be from a non-corporate, non-farming background.
  4. Depending on the type of Mudra loan being applied for, the enterprise can either be a new or existing business unit.
  5. The following individuals and enterprises operating either in rural or urban areas are eligible for applying for a Mudra loan.
  • Small manufacturing units
  • Service sector units
  • Shopkeepers
  • Fruit and vegetable vendors
  • Truck operators
  • Food-service units
  • Repair shops
  • Machine operators
  • Small industries
  • Artisans
  • Food processors

The following lending institutions are eligible for providing Mudra loans.

  • Private sector banks
  • Public sector banks
  • Regional rural banks (RRBs)
  • Small finance banks
  • Micro finance institutions
  • Non-Banking Financial Institutions (NBFCs)


That’s about it with the eligibility for mudra loan. It is a special scheme that is designed to cater to small businesses and help them get on their feet. If you ever need more information on this scheme, you could always visit Finserv MARKETS. It is an online marketplace that’s replete with information on the Mudra loan scheme and also has plenty of other financial products for you to choose from.