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    Mudra Loan Interest rates

    Pradhan Mantri Mudra Yojana is a special scheme set up by the Government of India through an institution named Micro Units Development & Refinance Agency Limited (MUDRA) in order to provide financing aid through loans to the non-corporate non-farm sector income generating activities of micro and small entities (subject to those enterprises with credit needs below INR 10 lakhs).

    The Pradhan Mantri Mudra Yojana (PMMY) has three facilities or options available for catering to enterprises at different stages of growth and financing needs. These options are Shishu, Kishore and Tarun.

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    Pradhan Mantri Mudra Yojana (Mudra Bank Loan) Interest rates

    Mudra Loan Interest rates

    The loans availed as per this scheme can be used for multiple purposes, like vehicle loans for automobiles meant for commercial purposes, business instalment loans that can aid in working capital financing / purchase of plant and machinery / renovating the infrastructure and/or business loans group and rural business credit.

    As per the financing options available under the scheme, the interest rates and loan limits vary to accommodate for the growth stage of the concerned enterprise availing the loan. As of November 2015, the applicable rates and limits are as follows

    1. Shishu – Loans up to a maximum of INR 50000 with rate of interest being 1% per month or 12% per annum. Repayment period up to 5 years
    2. Kishore – Loans exceeding INR 50000 up to INR 5 lakhs. The rate of interest will be dependent on the bank, in accordance with the schemes guidelines, keeping the credit history of the applicant in view. Repayment period based on the discretion of the bank
    3. Tarun – Loans exceeding INR 5 lakhs up to INR 10 lakhs. The rate of interest will be dependent on the bank, in accordance with the schemes guidelines, keeping the credit history of the applicant in view. Repayment period based on the discretion of the bank

    It is clear from the above mentioned points that the first option which caters to budding businesses has the most affordable rates and a fixed repayment term irrespective of the applicant’s or the business’ performance and history. The above, however are subject to change based on the scheme’s guidelines.

    A total of 27 Public Sector Banks, 17 Private Sector Banks, 31 Regional Rural Banks, 4 Co-operative banks, 36 Microfinance Institutions and 25 Non-Banking Financial Institutions have currently been selected to allow disbursement of this loan. 60% of the loans under this scheme are set to be offered through the ‘Shishu’ option and the rest 40% will be through the ‘Kishore’ and ‘Tarun’ schemes.

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    Mudra Loan Interest rates 2018 (Updated)

    Mudra Loan Bank Interest rate Tenure
    HDFC 12.75% to 20% 1-5 years
    HDBFS 15.95% to 18.95% 1-3 years
    Tata Capital 13.49% to 19.50% 1-5 years
    Kotak Mahindra Bank 11.5% to 18% 1-5 years
    Capital First 13% to 20% 1-5 years
    Citibank 12.75% to 15.75% 1-5 years
    IndusInd Bank Ltd 12.99% to 18.25% 1-5 years
    Fullerton 19.50% to 37% 1-4 years
    Standard Chartered Bank 12.50% to 17% 1-5 years
    ICICI Bank 11.49% to 17.50% 1-5 years
    Aditya Birla Finance Ltd 14% 1-3 years
    Allahabad Bank 13.70% 1-5 years
    Bank of Baroda 14.15% 1-3 years
    Bank of Maharashtra 15.20% 1-3 years
    Bank of India 12.7% to 14.7% 1-3 years
    Canara Bank 13.65% 1-3 years
    Central Bank 12.70% 1-3 years
    Dena Bank 13 % to 14% 1-3 years
    IDBI Bank 12.75% to 13.75% 1-5 years
    Indian Bank 12.65% to 13.65% 3 years
    Indian Overseas Bank 14.70% 1-5 years
    Karur Vysya Bank 13.9% to 16.40% 1-3 years
    Oriental Bank of Commerce 11.2% to 12.95% 1-5 years
    South Indian Bank 14.80% 1-4 years
    State Bank of Bikaner and Jaipur 13.2% to 14.2% 1-5 years
    State Bank of Hyderabad 15.25% to 15.75% 1-3 years
    State Bank of India 17.80% 1-4 years
    State Bank of Mysore 16.90% 1-3 years
    State Bank of Patiala 12.65% to 14.65% 1-5 years
    State Bank of Travancore 13.2% to 13.45% 1-5 years
    Tamilnad Mercantile Bank 14.4% to 16.4% 1-5 years
    UCO Bank 14.1% to 15.1% 4-5 years
    Union Bank of India 14.4% 1-5 years
    Vijaya Bank 13.7% 1-5 years
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    Highlights of the 2018-19 Union Budget on Pradhan Mantri Mudra Yojana (PMMY) or Mudra Loan

    The 2018-19 Union Budget meeting, led by the Finance Minister of India - Mr. Arun Jaitley, was commenced on 1 February 2018. To improve the financial condition of the country, this meeting focused on multiple sectors such as Micro, Small, and Medium Enterprises (MSME), agriculture and rural economy, infrastructure, finance, health, social security, education, tax, and others. The minister also concentrated on Mudra Loan offered under the Pradhan Mantri Mudra Yojana (PMMY).

    Since its inception in April 2015, a total of 10.38 crore self-employed individuals have availed the benefits of Mudra Loan by withdrawing a total credit of Rs.4.6 lakh crore. Out of the total number of loans, 76% of the loan accounts belong to women while over 56% belong to individuals who are SC, ST, or OBC. As the scheme has exceeded the targets set for all the previous years, the Government has decided to set the target for Mudra Loan during the upcoming financial year of 2018-19 at Rs.3,00,000 crore.

    The meeting also indicated that this year’s focus will be on Non-Bank Finance Companies (NBFC). When the MSMEs were struggling to receive financing after the country was hit by demonetisation, the NBFCs of India had stepped up to the task and provided financial aid to many. This not only helped MSMEs receive the monetary relief they required during a their time of need, but also proved that NBFCs are powerful vehicles that can be used to provide Mudra Loans to the masses. Keeping this in mind, the Finance Minister has also announced during the Union Budget that the eligibility criteria and refinancing policies for NBFCs will be reviewed to offer them better chances of providing loans.

    In addition to MSMEs, Mudra Loans of Rs.10 lakh can also be availed for non-agricultural activities or projects that are partially aligned to agriculture such as poultry, dairy, bee keeping, and many more. Depending on the growth stage and credit requirements of the micro, small, or medium enterprise, an entrepreneur can avail 3 types of loans under PMMY - Shishu, Kishor, and Tarun.

    Mudra Loan Interest rates FAQs

    1. What is the interest rate under the Mudra/PMMY Scheme?

      Interest rates are dynamic and decided by the lending institution under broad guidelines from the RBI so as to keep the products cost effective.

    2. What is the target audience for Mudra Scheme?

      Mudra is targeted at Non-Corporate Small Business (NCSB) segment that includes business entities such as small manufacturing plants, shopkeepers, service sector installations, vegetable/fruit vendors, repair shops, truck operators, food-service units, artisans, machine operators, small industries, food processors etc.

    3. Why are the interest rates different for different institutions?

      Mudra loans are unsecured in nature as no collaterals are required to avail the loan. This is a reason why interest rates vary from institution to institution as every organization calculates the risk factor on its own and establishes rates accordingly.

    4. Are the loans subsidised by the central government?

      No, these loans are not subsidised by the central or state governments.

    5. What does the Mudra application form look like?

      For the starting category of Shishu Loans, a 1 page application form needs to be duly filled and submitted. For Kishor and Tarun categories of loans, a 3 page application form needs to be submitted.

    6. Where can I find the Mudra Loan application forms?

      You can find the application forms online on the Mudra website or get one from any of the intermediaries.

    7. What is the repayment criteria for Mudra Loans?

      The repayments terms and conditions are decided by the intermediary lending institution according to its rules considering the cash flow of the business in question.

    8. Do all banks in India fall under the Mudra Scheme?

      Yes, the Department of Financial Services (DFS) has already sent advisories to Public Sector Banks, Scheduled Commercial Banks and Regional Rural Banks for bringing all loans up to Rs.10 lakhs disbursed for non-farm income generation activities after April 7th 2015 under the Mudra Scheme. The DFS has also instructed all banks to provide loans under the scheme and put targets per branch.

    9. Is the PMMY Scheme active now?

      Yes, the scheme has been active since April 8th 2015 throughout the country.

    10. How long is the processing time for Loans under the Mudra Scheme?

      Lower amount Shishu loans are generally disbursed within 7-10 days while the other categories have processing times varying from lender to lender.

      Know more about Mudra Loan

      Mudra loan is a new scheme from the Government of India that aims to rejuvenate the refinancing sector for micro units enterprises. Learn more about the Mudra Bank Loan here.

      Know more about Mudra Loan Eligibility

      Mudra loans come with minimal eligibility requirements as the aim is to empower the business community at the margins. Learn more about the eligibility requirement for Mudra Loans here.

    Mudra Loan Interest rates Reviews

    • ICICI Bank Personal Loan
      "Need to reduce charges"
      0.5 4.0/5 "Great!"
      I have taken a personal loan with ICICI bank and the experience was good, the loan amount was for Rs 2 lakhs with high interest rate of 15.5%. The process was quick and i received my loan amount on time. I paid Rs 12000 for insurance and the tenure period for this loan is 48 months.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jun 19, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It has been a very good experience with them and the process in getting the loan has been very good. The security with them had been good and i am satisfied with the loan amount which they had provided. The interest rate has been good with them and the whole process had been good. It has been almost two to three months since i have taken the loan.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 19, 2018
    • Axis Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a good process in getting this loan and i am satisfied with the loan amount which have been provided by them, The interest rate with them had been good as well as the process has taken less time and there has not been any issues so far.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • ICICI Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a very good experience with this loan and the loan amount which they had provided had been satisfactory as well. The interest rate with them has been quite good compared with the market rate. The whole process had been pretty smooth and easy where it has taken very less time in getting the loan amount.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have a good experience dealing with this on line tool. I received good customer service and response as when I applied for the product on their website. They have an user website where we can navigate through everything hence it was easy to choose. I am very much satisfied with their services.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • Tata capital Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a personal loan from Tata Capital, it was a good choice that I have made, the processing my loan amount at the earliest it was not delayed, the customer service was also good, they assisted me well. The rate of interest they have charged is also quite OK as compared to others.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      The services I received from this on line tool was good, they have many options to choose the financial product from their website, it was good and hassle free, I received good customer service who helped me and assisted me in processing my application and documents, I was quite happy with the services they have provided.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 19, 2018
    • IndusInd Bank Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a personal loan from IndusInd bank, the services were quite good, I got good assistance in processing my loan application, but however the loan process was delayed a bit with documentation other than that there is no issue. Even the rate of interest was good enough.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.5/5 "Excellent!"
      My experience that I had with this on line portal has been good n terms of services and the processing they did. I received proper communication for the product I have chosen and it went smoothly. But my only complain is that I get repeated calls in same day for same queries, if they could do some proper management for that and improve on that aspect it would be great.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • IndusInd Bank Personal Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan from IndusInd bank, everything was OK, except the rate of interest they have charged which I believe is a bit high as compared to others. They have charged me around 15.5 % for loan amount of Rs. 5,00,000 for 4 years. Rest assured I received the amount on time everything was smooth I am happy.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.5/5 "Excellent!"
      I have a good experience with this on line tool, the services I have got has been good. The good part about their services is reaching out to customer service is very easy, you don't have to go through any IVR and they are directly approachable for your quick queries. I am quite satisfied.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 19, 2018
    • Tata capital Personal Loan
      "Average"
      0.5 3.5/5 "Pretty good"
      My experience of personal loan with Tata Capital has been some what OK as I received the loan amount on time and I was aware about the rate of interest they have charged, however there was no annual fees but there was an insurance fee that they have charged which I came to know in mid process I was not quite happy about that.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 19, 2018
    • Standard Chartered Bank Personal Loan
      "Wonderful"
      0.5 4.0/5 "Great!"
      Rate of interest is around 11.49% for the personal loan with the Standard Chartered bank. Customer service is good too with the Standard Chartered bank. Everything is better one with them till now. All of the aspects are better one with the Standard chartered bank.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Best"
      0.5 4.0/5 "Great!"
      Bankbazaar.com is good one and am using it from the February onward. I would like to say that the customer service is good one and the response is also good too. I am happy with the Bankbazaar.com till now.
      Was this review helpful? 0
      , visakhapatnam
      Reviewed on Jun 19, 2018
    • HDFC Bank Personal Loan
      "Best"
      0.5 4.0/5 "Great!"
      Interest rate is around 17.5% for the personal loan with the HDFC bank. I would like to say that the response is good one for me with them and the processing charges are on higher end like its around 7000 Rupees.
      Was this review helpful? 0
      , visakhapatnam
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Wonderful"
      0.5 4.5/5 "Excellent!"
      I am using Bankbazaar.com from the last three years of time. All of the financial products, I used to get it through them. Everything is an excellent one for me with them as such. I have never faced any such issues with them till now.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • HDFC Bank Personal Loan
      "Wonderful"
      0.5 4.0/5 "Great!"
      Rate of interest is around 11% for the personal loan with the HDFC bank. I would like to say that the processing charges are on higher end. Apart from that everything is good one with the HDFC bank for the personal loan.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good "
      0.5 4.0/5 "Great!"
      Bankbazaar.com is good one and am using it from the last two months of time. I would like to say that the customer service is good one with the Bankbazaar.com. I am really happy with the Bankbazaar.com till now.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 19, 2018
    • ICICI Bank Personal Loan
      "Okay"
      0.5 4.0/5 "Great!"
      10.99% is the rate of interest for the personal loan with the ICICI bank. I would like to say that the response is good one with the ICICI bank. Everything is better one for me with the ICICI bank, also am really happy with them till now.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good "
      0.5 3.0/5 "Satisfactory"
      I am using Bankbazaar.com from the last one year of time. I would like to say that the customer service is good one with them and the online portal is easy to access. Everything is better one for me with the Bankbazaar.com.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 19, 2018
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