PM Mudra Loan 2026: Tarun Plus Rs 20 Lakh + Women 59.81%

What PM Mudra Loan Yojana is in 2026

Pradhan Mantri Mudra Yojana (PMMY) is the central government's collateral-free small-business loan scheme, launched on 8 April 2015 under the Ministry of Finance. In 2026 it has four tiers: Shishu (up to Rs. 50,000), Kishor (Rs. 50,001 to Rs. 5 lakh), Tarun (Rs. 5 lakh to Rs. 10 lakh), and the newest tier Tarun Plus (Rs. 10 lakh to Rs. 20 lakh) added on 24 October 2024 for repeat borrowers with a clean Tarun repayment record. Cumulative sanctions crossed Rs. 40.07 lakh crore across 57.79 crore accounts as of the 11th anniversary press release from PIB in April 2026.

Two facts about PMMY are missing from every top-ranking competitor page. First, the Tarun Plus tier that lets a successful borrower move from Rs. 5 lakh loans up to Rs. 20 lakh under a single scheme with CGFMU credit guarantee cover. Second, the gender profile of the loan book: 59.81% of MUDRA accounts are held by women, and women borrowers account for 37.45% of disbursed value (PMMY dashboard, 2025). Both facts shape how a first-time borrower should structure their loan journey.

The rest of this page walks through the four-tier ladder, the Tarun Plus repeat-borrower funnel, the CGFMU guarantee coverage, women-specific data, and the practical application flow at the 40-plus participating banks and NBFCs.

The four tiers of PMMY, at a glance

Interest rate ranges are indicative and set by individual banks based on borrower profile and internal benchmark rates. All tiers are collateral-free. Repayment tenure ranges from 3 to 5 years for Shishu and Kishor, up to 7 years for Tarun and Tarun Plus.

Union Budget 2024-25 announced the Tarun Plus tier explicitly to close the "missing middle" gap where borrowers who successfully repaid a Tarun loan had no clear next step within PMMY. Before Tarun Plus, they had to move to the general MSME credit market (Stand-Up India, SIDBI direct lending, or bank commercial credit) at higher interest rates.

The Tarun Plus repeat-borrower funnel

Tarun Plus is designed as the second cycle of the same borrower's PMMY journey. Eligibility criteria are strict.

Requirements to qualify for Tarun Plus:

1. Prior successful Tarun repayment. You must have taken a Tarun-tier loan (Rs. 5 lakh to Rs. 10 lakh) previously and repaid it in full without default, restructuring, or write-off. Bank confirms this from their loan management system.
2. Cleaned CIBIL score. Score above 700 typically required. Rejections cluster below 680.
3. Enterprise continuity. The new Tarun Plus loan must be for the same enterprise (proprietorship, partnership, private limited) that took the earlier Tarun loan. Fresh enterprise deployments don't qualify.
4. Udyam registration. Enterprise must be Udyam-registered with active MSME status.
5. GST returns filed for the last 8 quarters. For enterprises with turnover above Rs. 40 lakh (mandatory GST registration threshold).

The theoretical borrower journey under PMMY looks like:

• Year 1: Shishu Rs. 30,000 to start a mobile phone accessory retail shop
• Year 2: Kishor Rs. 2 lakh to add inventory and open a second location
• Year 4: Tarun Rs. 8 lakh to add a small warehouse and delivery bike
• Year 6-7: Tarun Plus Rs. 15 lakh to open a third location and hire two full-time staff

Not every borrower will climb the full ladder, and most micro-enterprise borrowers stay within Shishu-Kishor. But for those with genuine growth trajectories, the four-tier design keeps them inside PMMY's collateral-free structure through their scaling journey.

CGFMU credit guarantee coverage

Credit Guarantee Fund for Micro Units (CGFMU) is the wrapper that lets Mudra loans go out without collateral. When a borrower defaults, CGFMU compensates the lending bank for 75% of the outstanding amount (for Shishu and Kishor) or 60% (for Tarun and Tarun Plus). The bank writes off the remaining loss.

CGFMU coverage was extended to Tarun Plus loans by the Financial Services Ministry gazette notification in October 2024, effective the same day as the Tarun Plus tier launch. Before that extension, banks were reluctant to offer loans between Rs. 10 lakh and Rs. 20 lakh without third-party guarantors or physical security. The CGFMU extension removed that friction.

Guarantee fee is charged to the borrower as part of the effective interest rate (typically 0.37% to 1.35% p.a. depending on borrower category and loan tier). This is included in the interest rate range quoted by the bank, not a separate line item.

For the borrower, the practical implication: no property mortgage, no gold pledge, no fixed deposit lien on any PMMY loan up to Rs. 20 lakh. The bank cannot ask for collateral for a genuine PMMY case.

The women borrower dominance

Women hold 59.81% of MUDRA accounts (34.5 crore of 57.79 crore) and account for 37.45% of disbursed value as of the 2025 PMMY dashboard. The gap between account share and value share is meaningful: women borrowers are concentrated in Shishu and Kishor tiers, which have smaller individual loan sizes. Men borrowers are relatively over-represented in Tarun and Tarun Plus.

Three implications for women borrowers:

Shishu tier is the primary starting point. Roughly 68% of women borrowers hold Shishu loans, per Ministry of Finance briefing data. Most target micro-retail (kirana, tailoring, beauty parlour, home-based food) with loans under Rs. 30,000.

Bank preference at Shishu tier is toward women applicants. Many public sector banks internally target 60% or higher women borrower share at Shishu tier. If you're a woman applicant, your Shishu application is likely to be viewed favourably by branch managers with unfilled women-borrower quotas.

Graduation to Kishor takes 18 to 24 months on average for women. Compared with 12 to 18 months for men. The gap is largely because of turnover trajectory, not repayment discipline. Women borrower default rates are lower than men across all four tiers per SIDBI portfolio data (2024).

If you're a woman planning to build to Tarun over 4-5 years, start with Shishu at Rs. 30,000-Rs. 40,000, repay in 24 months, apply for Kishor at Rs. 1.5 lakh-Rs. 3 lakh, repay in 24-36 months, then move to Tarun. This is a proven ladder for women micro-enterprise borrowers under PMMY.

Structural shift: Kishor tier is where the growth is

One of the most telling PMMY trends over 10 years is the Kishor tier share of overall loans. Kishor was 5.9% of sanctions in FY 2015-16. By FY 2024-25 it had risen to 44.7% (Ministry of Finance briefing, 2025). Shishu tier share fell from 92% in FY 2015-16 to 47% in FY 2024-25.

The interpretation: existing micro-enterprises are graduating out of the sub-Rs. 50,000 space into the Rs. 1 lakh to Rs. 5 lakh range. That's a structural upgrade of the loan book, and it suggests PMMY is doing what a ladder scheme is meant to do: keep borrowers inside the collateral-free ecosystem as they grow rather than pushing them into commercial credit prematurely.

For a first-time borrower today, this shift means banks are increasingly comfortable at Kishor-tier ticket sizes. A Rs. 1.5 lakh Kishor loan for a home-based food business or a Rs. 3 lakh Kishor loan for a two-machine tailoring workshop is a much easier ask in 2026 than it was in 2019.

How to apply for a Mudra loan

The application process is standard across the 40-plus participating banks and NBFCs. It works at all scheduled commercial banks, most regional rural banks, cooperative banks, and select NBFCs.

Option 1: Physical branch application. Visit any participating bank branch. Take Aadhaar, PAN, Udyam Registration Number, latest 6 months' bank statement, latest 2 years' ITR (if filed), latest GST returns (if registered), and a one-page business plan with revenue projection. The bank fills the Mudra loan application form. Processing time is 7 to 21 working days for Shishu, up to 45 days for Tarun and Tarun Plus.

Option 2: JanSamarth portal. The Government of India's unified credit facilitation portal at jansamarth.in lets applicants submit a single application that multiple banks can view. Banks compete on offer terms. Best used for Kishor and above where borrowers have some negotiating leverage.

Option 3: Udyami Mitra portal. SIDBI's smaller-business facilitation portal at udyamimitra.in also accepts Mudra applications and connects them to preferred lenders. Slightly better UX for first-time applicants than JanSamarth.

Option 4: Bank internet banking. Most major public sector banks (SBI, PNB, Bank of Baroda, Union Bank) offer Mudra pre-application online. Full application requires branch visit for KYC completion.

There is no direct application on mudra.org.in for the loan itself. mudra.org.in is the scheme's information portal, not the application portal.

Common rejection reasons

Four rejection patterns show up most often at the branch approval stage.

Weak business plan. A one-liner "I want to open a shop" doesn't work. The bank needs to see projected revenue, cost structure, break-even month, and how the loan will be deployed (working capital vs equipment vs both). Two pages, honest numbers.

Aadhaar-PAN mismatch. If your name spelling differs across Aadhaar and PAN (a common issue for married women who updated PAN but not Aadhaar or vice versa), the loan management system rejects the application at KYC verification. Fix Aadhaar or PAN before applying.

CIBIL score below 680. Below 680, most banks decline. Below 720, banks may push you to a higher interest rate slab. Get a free CIBIL report at cibil.com before applying and dispute any errors first.

Non-existent Udyam registration. For loans above Rs. 50,000, banks are increasingly asking for Udyam registration even for proprietorship businesses. Register free at udyamregistration.gov.in before the application.

Repayment discipline: what to know before you borrow

Mudra loans don't come with a moratorium on interest. From month one, you owe the EMI, which combines principal repayment and interest. Missing an EMI for more than 30 days moves the account into SMA-1 (Special Mention Account category 1) on CIBIL. Beyond 90 days, it becomes an NPA (Non-Performing Asset), which effectively closes future PMMY access for the borrower.

Three practical repayment habits that keep the account healthy:

Auto-debit setup on day one. Set up NACH auto-debit from your business current account. Manual EMI payment is where most defaults start. Auto-debit removes the human error variable.

One-month EMI buffer in the current account. Keep a floor balance equal to one EMI in your operating account. If a bad month hits, the buffer prevents the auto-debit failure that triggers SMA-1.

Foreclosure penalty is low. Most banks charge 1% to 2% foreclosure fee on Mudra loans, or none at all. If you have surplus cash and want to close the loan early, do it. Early closure improves CIBIL and speeds up the graduation to the next tier.

What changes for gig workers and platform sellers

E-commerce sellers on Amazon, Flipkart, Meesho, and platform gig workers on Uber, Zomato, Swiggy, Urban Company have been formally recognised as eligible PMMY borrowers since late 2024. This was a policy shift, not just an administrative one.

Under the earlier framework, platform sellers and gig workers were treated ambiguously because they lacked the traditional MSME markers (physical shop, GST-registered proprietor, formal employee count). The 2024 shift lets banks treat platform sellers' verified platform revenue as income evidence and their platform account statement as bank-statement substitute for KYC purposes.

For an Amazon seller with 12 months of Rs. 1.5 lakh average monthly turnover, the Kishor tier at Rs. 3 lakh to Rs. 5 lakh becomes accessible with just Aadhaar, PAN, Amazon seller dashboard PDF, and 6 months' bank statement. This has significantly expanded Mudra loan access for e-commerce entrepreneurs in tier-2 and tier-3 cities.

Mudra loan interest rate 2026: bank-wise comparison

Mudra loan interest rates vary by bank, tier, borrower profile, and the bank's internal benchmark rate. Here's the actual range across major public sector banks and top private sector lenders as of July 2026, based on published loan schedules.

Public sector banks offer lower interest rates than private banks by 50 to 200 basis points on average. For a first-time Mudra borrower, PNB, SBI, and Bank of Baroda typically offer the best rate for Shishu and Kishor tiers. For Tarun and Tarun Plus tiers, negotiate on your CIBIL score (720+) and account relationship (existing current account 6 months+) to get to the lower end of the quoted range.

How rates are set:

• Bank's Marginal Cost of Funds Lending Rate (MCLR) + spread (typically 1% to 3%)
• CGFMU guarantee fee (0.37% to 1.35% p.a.) built into the effective rate
• Tenure premium (add 0.25% to 0.75% for 5+ year tenor)
• Risk profile adjustment based on CIBIL, income proof, and business plan

JanSamarth Mudra loan apply online: step-by-step

The Government of India's unified credit facilitation portal at jansamarth.in offers the fastest way to apply for a Mudra loan with multi-bank offers in one submission. Most competitor pages point to individual bank websites and miss this consolidated route.

Step 1: Register on jansamarth.in.

1. Visit jansamarth.in and click "Register" in the top-right
2. Select "PM Mudra Yojana" as the credit scheme category
3. Enter your mobile number and OTP verify
4. Set a login PIN

Step 2: Complete the borrower profile.

1. Aadhaar authentication (OTP based)
2. PAN details
3. Enterprise details (proprietorship / partnership / private limited)
4. Udyam Registration Number if you have one
5. Bank account for disbursement (should be Aadhaar-seeded)

Step 3: Submit business information.

1. Business activity with 4-digit NIC code
2. Monthly revenue estimate
3. Loan amount required and tier (Shishu / Kishor / Tarun / Tarun Plus)
4. Loan purpose: working capital / equipment / both

Step 4: Upload documents.

• Aadhaar (mandatory)
• PAN (mandatory)
• Udyam certificate (for loans above Rs. 50,000)
• Last 6 months bank statement (for Kishor and above)
• Last 2 years ITR (if filed)
• Last 4 quarters GST returns (if registered)
• One-page business plan

Step 5: Receive multi-bank offers.

Within 5 to 15 working days, participating banks review your application and submit offers with proposed loan amount, interest rate, tenure, and processing fee. You can accept any one, or none.

Step 6: Accept an offer and complete branch KYC.

Even with online application, you'll need one physical branch visit for final KYC and loan agreement signing. Bank sends a scheduled slot after you accept the offer.

Total application-to-disbursement time via JanSamarth: 15 to 35 working days depending on tier and bank. Faster than walking into a single branch and waiting for their internal processing.

Tarun Plus after successful Tarun repayment: exact eligibility

Tarun Plus is the newest and least understood PMMY tier, launched 24 October 2024. Since it's only available to repeat Tarun borrowers, the exact eligibility criteria matter for 5.2 crore existing Tarun account holders considering moving up. Here's the definitive checklist.

Prior Tarun loan requirements:

1. Prior Tarun-tier loan (Rs. 5 lakh to Rs. 10 lakh) must have been fully repaid. Partial repayment doesn't qualify. Bank confirms this from their loan management system by checking the "Closed" or "Fully Paid" status of the earlier loan account.
2. No default, restructuring, or write-off in the earlier Tarun repayment. The earlier loan must have closed at the original agreed maturity date without any relief measures.
3. Minimum 6-month cooling period after Tarun closure. You cannot apply for Tarun Plus the day after your Tarun loan closes. Banks want to see 6 months of clean CIBIL history post-closure to demonstrate you can operate without loan support before extending Rs. 20 lakh.

Current-state requirements:

1. CIBIL score above 720. Rejections cluster below 700. Tarun Plus borrowers typically have CIBIL 750+.
2. Same enterprise. The new Tarun Plus loan must fund expansion of the same enterprise that took the earlier Tarun loan. Applying for Tarun Plus for a completely new enterprise is not allowed.
3. Active Udyam registration with current MSME status. Register at udyamregistration.gov.in if you haven't. Old udyog aadhaar registrations were migrated to Udyam in 2020.
4. GST returns filed for last 8 quarters (for enterprises with turnover above Rs. 40 lakh, the mandatory GST threshold).
5. Enterprise turnover growth of at least 30% over the Tarun tenure. Banks want evidence that the earlier loan actually helped the enterprise grow, justifying a larger next-tier loan.
6. No outstanding statutory dues. GST, PF, ESI, and income tax should all be current. Any pending demand notices trigger rejection.

Documents specific to Tarun Plus:

• Loan closure certificate from the earlier Tarun-lending bank (get this proactively when you close the Tarun loan; banks issue on request)
• Enterprise financial statements for 3 years (audited if turnover above Rs. 1 crore)
• Detailed expansion plan showing how the Rs. 10 to Rs. 20 lakh Tarun Plus funds will be deployed
• Projected cash flow for 5 years demonstrating repayment capacity

For a Tarun graduate who meets all 9 criteria and holds the closure certificate, Tarun Plus application usually processes in 30 to 45 working days at a public sector bank. Faster at your existing Tarun-lender bank because they already have your KYC and history.

Frequently asked questions