An sbi mudra loan is a business loan that the State Bank of India offers under the Pradhan Mantri Mudra Yojana (PMMY), the Government of India’s scheme for funding small and micro businesses. It is meant for shopkeepers, small manufacturers, service providers, traders and others who run — or want to start — a small non-farm business and need money for working capital, equipment or expansion. This guide explains the loan categories with their current limits, who can apply, which documents are needed, and how to apply online and at a branch.
What Is the SBI Mudra Loan?
MUDRA stands for Micro Units Development and Refinance Agency. The Pradhan Mantri Mudra Yojana was launched on 8 April 2015 to “fund the unfunded” — to bring small entrepreneurs who could not get bank credit, usually because they had no security to offer, into the formal banking system. Under the scheme, banks like SBI, along with other banks, NBFCs and microfinance institutions, give loans to non-corporate, non-farm micro and small enterprises in the manufacturing, trading and services sectors. Activities allied to agriculture, such as dairy, poultry and beekeeping, are also covered.
SBI offers these loans through its branches, and existing SBI customers can also start the process online through the bank’s e-Mudra facility. The loan is a business loan — it is not a personal loan for household spending — and the amount you can get depends on the category your business falls into, explained below.
Objective of the Mudra Scheme
Most small businesses begin with the owner’s own savings, and growth often stalls because that money runs out. Borrowing from informal moneylenders fills the gap, but usually at a heavy cost and on harsh terms. The objective of PMMY is to replace that informal borrowing with institutional credit given by banks under a common framework: no collateral for the borrower, a standard application route, and categories matched to the stage of the business — a small amount to start, more to grow, and still more to expand.
Mudra Loan Categories: Shishu, Kishore, Tarun and Tarun Plus
Mudra loans are divided into categories based on the size of the loan and the stage of the business. Earlier there were only three categories with a maximum of ₹10 lakh. In the Union Budget 2024-25 the limit was enhanced, and a fourth category, Tarun Plus, took effect from 24 October 2024, raising the maximum to ₹20 lakh for eligible borrowers.
| Category | Loan Amount | Who It Is For |
|---|---|---|
| Shishu | Up to ₹50,000 | New and very small businesses starting out |
| Kishore | Above ₹50,000 and up to ₹5 lakh | Existing businesses that need funds to grow |
| Tarun | Above ₹5 lakh and up to ₹10 lakh | Established businesses planning expansion |
| Tarun Plus | Above ₹10 lakh and up to ₹20 lakh | Entrepreneurs who have already taken a Tarun loan and repaid it successfully |
Two points are worth noting. First, Tarun Plus is not open to first-time borrowers — it is specifically for those who have availed and repaid a loan under the Tarun category. Second, Mudra loans are collateral-free: you do not have to mortgage property or pledge assets, as the loans are covered by the Credit Guarantee Fund for Micro Units (CGFMU). The interest rate is not fixed by the government; each bank sets it according to RBI guidelines and its own policy, so compare the rate and charges mentioned in your sanction letter before signing.
Who Can Apply: Eligibility
The basic eligibility conditions for an SBI Mudra loan are:
- The applicant must be an Indian citizen running, or planning to start, a non-farm micro or small business — as an individual, proprietary concern, partnership firm, company or similar entity.
- The business activity should be in manufacturing, trading or services, or an allied agricultural activity.
- The applicant should not be a defaulter of any bank or financial institution and should have a satisfactory credit record.
- For SBI’s online e-Mudra route, you must hold a savings or current account with SBI that has been active for at least six months.
- You should know your business requirement clearly — the amount needed and the purpose it will be used for.
People from both rural and urban areas can apply; there is no restriction based on where the business is located.
Documents Required
Keep the following documents ready. The branch may ask for additional papers depending on the loan amount and the type of business:
- Bank account passbook or statement of your SBI account
- Aadhaar card and PAN card
- Identity proof and address/domicile proof
- Proof of business — registration certificate, licence or other business documents, and GST number where applicable
- Category certificate, where applicable
- Educational documents, where asked for
- Salary slip or income documents for salaried applicants applying alongside, and tax return documents where applicable
How to Apply for an SBI Mudra Loan Online
Existing SBI customers can apply through the e-Mudra facility on SBI’s website:
- Visit SBI’s official website and open the e-Mudra loan page.
- Read the information shown and click on “Proceed”.
- Complete the Aadhaar-based e-KYC: enter your Aadhaar details as prompted by the UIDAI window.
- An OTP is sent to the mobile number registered with your Aadhaar. Enter the OTP and submit. For this step your mobile number must be correctly linked to your account and Aadhaar — if it is not, first complete the process to link your mobile number with your bank account.
- Fill in the application form, upload the required documents in PDF format (within the file-size limit shown on the portal, earlier 2 MB), and submit.
- You will receive an SMS about the next steps. Complete any remaining formalities within the time given (earlier, within 30 days).
- The bank verifies your documents and contacts you about the decision.
Mudra loan applications can also be submitted through the government’s Jan Samarth portal and the Udyamimitra portal, which forward your application to the lender you choose.
How to Apply at an SBI Branch
- Visit the SBI branch where you hold your savings or current account.
- Meet the concerned official and explain your business and the amount you need; the official will indicate the right Mudra category.
- Collect the application form, fill it carefully, and attach the required documents.
- Submit the form to the official. Your documents are verified, and the bank contacts you after processing.
- Once sanctioned, the loan amount is credited to your bank account.
After taking any bank loan, keep track of its repayment schedule and account activity. If you also hold loans with other banks, our guide on checking your UCO Bank loan status shows how application tracking works there, and SBI customers may also find our SBI credit card status guide useful.
Interest Rate, Tenure and Other Key Points
- Interest rate: Decided by SBI as per RBI guidelines and the bank’s policy; it varies by category, amount and borrower profile. Check the exact rate in your sanction letter.
- Repayment tenure: Generally 3 to 5 years for term loans, as per the sanction terms.
- Security: No collateral is required; loans are covered under the CGFMU guarantee.
- Subsidy: No subsidy is provided under the Mudra scheme — it is a repayable bank loan, so plan the repayment before you borrow.
Safety note: Apply only through SBI’s official website, the Jan Samarth or Udyamimitra portals, or an SBI branch. The bank never asks for your OTP, PIN, password or CVV on a call or message — never share these with anyone, and never pay any agent who promises to “guarantee” a Mudra loan for a fee.
Frequently Asked Questions
What is the maximum amount I can get under the SBI Mudra loan?
The maximum is now ₹20 lakh under the Tarun Plus category, available to borrowers who have successfully repaid a Tarun loan. The regular categories go up to ₹10 lakh (Tarun), ₹5 lakh (Kishore) and ₹50,000 (Shishu).
Can people from urban areas apply for the SBI Mudra loan?
Yes. The scheme covers businesses in rural, urban and metro areas. What matters is the type and size of the business, not its location.
Is any collateral or security required for a Mudra loan?
No. Mudra loans are collateral-free and are covered by the Credit Guarantee Fund for Micro Units (CGFMU), which is why small businesses without property to pledge can still apply.
What is the repayment tenure of an SBI Mudra loan?
The repayment period is generally 3 to 5 years, depending on the loan amount, category and terms in your sanction letter. Working capital facilities are reviewed as per the bank’s norms.
Is any subsidy provided under the Mudra loan scheme?
No, there is no subsidy under PMMY. It is a regular bank loan that has to be repaid with interest, though it is collateral-free and follows a standard application process.
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