PM MUDRA Yojana: Loan Categories, Refinancing, Tarun Plus
Why in the news
The scheme reached its 11th anniversary in April 2026, prompting a look at how it has drawn small, informal businesses into formal credit since 2015.
Key facts
- MUDRA (Micro Units Development & Refinance Agency Ltd.) works as a refinancing body and does not lend directly to individuals.
- It supplies funds to commercial banks, RRBs, small finance banks, MFIs and NBFCs, which lend to micro-enterprises.
- Guarantee for such loans comes via the National Credit Guarantee Trustee Company (NCGTC), so loans carry no collateral.
- Tarun Plus was added in 2024 to back high-performing micro-enterprises.
- Launch date: 8 April 2015.
| Category | Loan range | Intended stage |
|---|---|---|
| Shishu | Up to ₹50,000 | Start-ups, seed capital |
| Kishore | ₹50,000 to ₹5 lakh | Established units needing expansion |
| Tarun | ₹5 lakh to ₹10 lakh | Scaling and diversification |
| Tarun Plus | ₹10 lakh to ₹20 lakh | Only for those who repaid Tarun loans |
About the scheme
- MUDRA Card: a RuPay debit card giving working capital as an overdraft; the borrower withdraws as needed and pays interest only on the amount used.
- Coverage: non-farm income-generating activity in manufacturing, trading and services. Allied activities such as poultry, dairy and beekeeping are included; direct crop farming is not.
- NCGTC: covers part of the bank’s loss if a borrower defaults.
Exam angle
- MUDRA is a refinancing agency, not a direct lender.
- Highest slab: Tarun Plus, up to ₹20 lakh.
- Card type: RuPay debit card with overdraft facility.