By the FlexiLoans Editorial Desk · Reviewed by a business-lending specialist · Updated August 2026
Quick answer: The Mudra (PMMY) scheme lends from a few thousand rupees up to ₹20 lakh, split into four tiers. Shishu covers up to ₹50,000, Kishore ₹50,001–₹5 lakh, Tarun ₹5–10 lakh and Tarun Plus ₹10–20 lakh. Your tier depends on your business size, stage and funding need.
In this guide:
- Why Mudra splits its lending into four tiers
- The full tier table, with amounts and typical borrowers
- How to match your business stage to a tier
- Mudra loan eligibility and how the estimator tool works
- How Mudra compares with other small-business loans
Key takeaways
- Mudra loans run from tiny Shishu amounts up to ₹20 lakh under Tarun Plus. Four tiers cover four stages of growth.
- Your tier comes down to how much you need and how established your business is — not luck.
- Every Mudra loan is collateral-free, with a government guarantee behind it.
- Each lender sets its own rate, so compare a few offers before you sign.
What the Mudra loan scheme is and why tiers matter
Mudra stands for Micro Units Development and Refinance Agency. It runs under the Pradhan Mantri Mudra Yojana (PMMY). The idea is simple. The scheme helps small, non-farm businesses borrow money without pledging collateral.
You do not approach Mudra directly. You apply through a bank, NBFC or fintech lender that lends under the PMMY rules.
Mudra sorts its lending into four tiers. Each tier maps to a loan size and a business stage. That design makes Mudra loan eligibility easy to self-check. Once you know your tier, you know your likely amount. You can read the full scheme rules on the official Mudra (PMMY) portal.
Mudra loan tiers: Shishu, Kishore, Tarun, Tarun Plus
The four tiers are Shishu, Kishore, Tarun and Tarun Plus. Together they form the Shishu Kishore Tarun ladder that most micro businesses climb over time. The table shows each Mudra tier, its amount and who it suits.
| Mudra tier | Loan amount | Typical borrower |
|---|---|---|
| Shishu | Up to ₹50,000 | A brand-new or very small micro unit finding its feet |
| Kishore | ₹50,001 – ₹5 lakh | A growing business buying stock, tools or a small machine |
| Tarun | ₹5 lakh – ₹10 lakh | An established unit scaling up space, staff or output |
| Tarun Plus | ₹10 lakh – ₹20 lakh | A proven borrower who repaid a Tarun loan and needs more |
Source: MUDRA/PMMY tier structure; Tarun Plus (₹10–20 lakh) operational from 24 October 2024.
The ladder rewards a track record. A first-time borrower usually starts at Shishu or Kishore. The government raised the ceiling to ₹20 lakh in 2024 by adding Tarun Plus on top of Tarun.
How to spot your Mudra tier from your business stage
Your tier follows your stage and your funding need. How steady is my business? How much do I need? Use this quick guide, then confirm with the tool below.
| Your situation | Likely tier | Likely amount |
|---|---|---|
| Just starting; small first purchase | Shishu | Up to ₹50,000 |
| Trading 6–24 months; need working capital | Kishore | ₹50,001 – ₹5 lakh |
| Stable revenue; ready to expand | Tarun | ₹5 lakh – ₹10 lakh |
| Repaid a Tarun loan; scaling further | Tarun Plus | ₹10 lakh – ₹20 lakh |
Source: Indicative mapping for self-assessment; your lender sets the final tier and amount.
A few pointers help you place yourself correctly:
- Match the amount to a real plan, not a round number. Lenders fund a clear use of money.
- A longer, cleaner business history moves you up the ladder.
- Women entrepreneurs are a big part of the Mudra story; a business loan for women can pair well with a Mudra file.
- Allied activities like dairy, poultry and small food units also qualify.
Mudra loan eligibility and how the tool below works
Mudra loan eligibility rests on a short list of rules. Meet them, and any Mudra lender can consider your file.
- Business type: a non-farm, income-generating micro enterprise — trading, manufacturing, services or allied activity.
- Age: the applicant should be 18 to 65 years old.
- Repayment capacity: cash flow that comfortably covers the EMI.
- Clean record: you should not be a defaulter with any bank or NBFC.
- Documents: KYC (Aadhaar and PAN), business proof and bank statements; add Udyam registration to strengthen your file.
The estimator does the tier maths for you. Enter your business type and stage in the tool below. It maps you to a likely Mudra tier and a realistic amount. Then you apply for the right figure the first time — and you can apply for a Mudra loan online in a few steps.
What Mudra loan amount can you realistically expect?
The tier sets the ceiling. Your profile sets the actual figure. A lender rarely hands the full tier amount to a brand-new borrower. It weighs your turnover, vintage and repayment history first. So treat each band as a range, not a promise:
- Shishu covers a first, small need; Kishore funds stock, tools or a delivery vehicle.
- Tarun backs bigger expansion; Tarun Plus rewards a repaid Tarun loan, up to ₹20 lakh.
The scheme does not fix one interest rate. Each lender prices your loan on your profile. Banks are typically around 9–16% per annum (indicative). NBFCs and fintech lenders sit near 14–30% per annum (indicative). Always check the live rate before you sign — numbers change often.
Mudra loan vs other small-business funding options
Mudra is a strong first rung. But ₹20 lakh may not cover every plan, and not every business fits the micro definition. The table compares Mudra with other common routes.
| Option | Typical amount | Collateral | Best for |
|---|---|---|---|
| Mudra (PMMY) | Up to ₹20 lakh | None | Micro units, early to growth stage |
| Unsecured NBFC/fintech loan | ₹50,000 – ₹50 lakh | None | Speed, flexibility and larger needs |
| CGTMSE-backed term loan | Higher, up to ₹5 crore cover | None (guarantee) | Bigger, collateral-free expansion |
Source: Indicative; amounts, cover and terms vary by lender and scheme. Verify live details before applying.
If you have outgrown Mudra, an unsecured MSME loan from an NBFC or fintech can fund up to ₹50 lakh, often disbursed in about 48–72 hours. Match the route to your amount, timeline and eligibility — not just the lowest headline rate. A CGTMSE guarantee covers larger collateral-free loans; a CGFMU guarantee backs Mudra loans.
Frequently asked questions
Q: How much can you get under the Mudra scheme, and which tier are you in?
You can borrow up to ₹20 lakh under Mudra, across four tiers. Shishu goes up to ₹50,000, Kishore covers ₹50,001–₹5 lakh, Tarun runs ₹5–10 lakh, and Tarun Plus spans ₹10–20 lakh. Your tier depends on your stage and how much you need. The estimator tool above points you to the right one.
Q: What is the difference between Shishu, Kishore and Tarun?
The three tiers reflect three stages of growth. Shishu is for new or very small units up to ₹50,000. Kishore suits growing businesses at ₹50,001–₹5 lakh. Tarun backs established firms at ₹5–10 lakh. Tarun Plus then extends proven borrowers up to ₹20 lakh.
Q: Who is eligible for a Mudra loan?
Mudra loan eligibility covers non-farm, income-generating micro enterprises — traders, manufacturers, service providers and allied work like dairy or poultry. The applicant should be aged 18 to 65, with a viable plan and a clean repayment record. Both new and existing businesses can apply.
Q: Are Mudra loans collateral-free?
Yes. Every Mudra loan is collateral-free, so you pledge no property and need no third-party guarantor. The loan carries a government guarantee under CGFMU. That safety net makes Mudra a popular first loan for micro businesses.
Q: How do I choose the right Mudra tier for my business?
Start with your funding need and business stage. A small first purchase points to Shishu; steady growth points to Kishore or Tarun. If you repaid a Tarun loan, Tarun Plus opens up. Use the estimator tool above to confirm your tier and a realistic amount before you apply.
Knowing your tier turns a vague question into a clear plan. Match the amount to a real need, and apply for the right figure. The tool below gives you a tier and an amount in seconds. Explore FlexiLoans and check your Mudra loan eligibility today.
Sources & official references:
- MUDRA / PMMY (official) — https://www.mudra.org.in
- PIB — Mudra limit raised to ₹20 lakh (Tarun Plus) — https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2068019
- Udyam Registration (MSME) — https://udyamregistration.gov.in
