Loan Types: Mudra loans are provided under three categories based on the loan amount:

• Shishu: Loans up to ₹50,000 (for new startups or small businesses).

• Kishore: Loans ranging from ₹50,001 to ₹5 lakh (for businesses that are already operational and looking to expand).

• Tarun: Loans ranging from ₹5 lakh to ₹50 lakh (for established businesses aiming to scale up).

Eligibility:

• The loan is available to non-corporate small businesses, including proprietors, partnership firms, and micro-enterprises.

• Businesses should be in sectors like manufacturing, trading, and service industries.

• Applicants should not have access to formal credit sources or the ability to provide collateral.

No Collateral: One of the key advantages of the Mudra Loan is that it does not require any collateral or security. This makes it easier for small and micro-entrepreneurs to access finance.

Interest Rates: The interest rate for Mudra loans is typically competitive and is determined by the financial institution offering the loan. However, the rate is usually lower than traditional loans.

Repayment Period: The repayment period for Mudra loans can vary depending on the nature of the loan and the financial institution but typically ranges from 1 to 10 years.

Processing Fees: Mudra loans may attract nominal processing fees, which are generally lower compared to conventional loans.

Disbursement: Mudra loans can be availed from various financial institutions, including public sector banks, private banks, regional rural banks (RRBs), cooperative banks, and microfinance institutions (MFIs).