3 weeks ago
Mudra Loans Up To ₹20 Lakh: Categories, Eligibility And Application
Mudra loans help people borrow money for small businesses.
The scheme has four loan sizes: Shishu, Kishor, Tarun and Tarun Plus.
Shishu is for loans up to ₹50,000.
Kishor goes up to ₹5 lakh, while Tarun goes up to ₹10 lakh.
Tarun Plus allows loans up to ₹20 lakh and was introduced in 2024.
These loans do not require collateral, but lenders still check the applicant and the business.
The money can be used for shops, services, manufacturing, transport, dairy, poultry and other eligible activities.
People can apply through banks and other listed lenders, including digital channels.
Mudra loans are divided into Shishu, Kishor, Tarun and Tarun Plus categories.
Shishu loans go up to ₹50,000, while Kishor loans range from above ₹50,000 to ₹5 lakh.
Tarun loans cover amounts above ₹5 lakh to ₹10 lakh; Tarun Plus covers above ₹10 lakh to ₹20 lakh.
Loans are collateral-free but lenders assess eligibility, documents, business needs and repayment capacity.
Applications can be made through banks, regional rural banks, small finance banks, NBFCs, microfinance institutions and digital channels.
- Who
- Applicants seeking finance for eligible small businesses and agriculture-linked activities can apply, subject to lender assessment.
- What
- The government’s Mudra loan scheme offers collateral-free business loans of up to ₹20 lakh across four categories.
- Where
- Applications are available through banks, regional rural banks, small finance banks, NBFCs, microfinance institutions and digital channels.
- When
- Tarun Plus was launched in 2024; the article reports disbursement figures as of March 2026.
- Why
- The loans are intended to support small-business needs, including working capital and term finance.
Key facts
- Maximum loan
- Up to ₹20 lakh under Tarun Plus.
- Shishu
- Loans up to ₹50,000.
- Kishor
- Loans above ₹50,000 and up to ₹5 lakh.
- Tarun
- Loans above ₹5 lakh and up to ₹10 lakh.
- Tarun Plus
- Loans above ₹10 lakh and up to ₹20 lakh; introduced in 2024.
- Collateral
- Loans under all four categories are available without collateral.
- Lender assessment
- Approval depends on eligibility, business needs, documents and repayment capacity; interest rates are set by lenders under applicable RBI rules.
Sources
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