Mudra Loan for Women Entrepreneurs 2026: Shishu/Kishor/Tarun Categories, Interest Rate, How to Apply
Mudra Loan for Women Entrepreneurs 2026: Shishu/Kishor/Tarun Categories, Interest Rate, How to Apply
Starting a business in India is exciting. Getting funding for it? That's where most women entrepreneurs get stuck. Banks ask for collateral, credit history, and guarantors , things that many first-time women business owners don't have.
Enter Mudra Loan , the government's answer to funding small businesses without collateral. Under the Pradhan Mantri MUDRA Yojana (PMMY), women entrepreneurs get priority, lower interest rates, and loans up to ₹10 lakh with zero collateral required.
Over 70% of Mudra loan accounts belong to women , it's genuinely India's most women-friendly business loan scheme.
What Is Mudra Loan?
MUDRA (Micro Units Development & Refinance Agency) was established in 2015 to provide funding to micro and small enterprises. Under PMMY, loans are given through banks, NBFCs, and MFIs for non-farm, income-generating activities.
Three Categories
| Category | Loan Amount | Business Stage |
|---|---|---|
| Shishu | Up to ₹50,000 | Starting / very early stage |
| Kishor | ₹50,001 to ₹5,00,000 | Growing / expansion |
| Tarun | ₹5,00,001 to ₹10,00,000 | Established / scaling up |
Key Features
| Feature | Detail |
|---|---|
| Collateral Required | ZERO , no property or guarantor needed |
| Interest Rate | 8.40% - 12% (varies by bank and category) |
| Processing Fee | Minimal (0-0.5% of loan amount) |
| Repayment Period | Up to 5 years (7 years for some Tarun loans) |
| Women Priority | Yes , women get preferential treatment |
| Pre-payment Penalty | None |
| Mudra Card | Available (works like a credit card for business expenses) |
Interest Rates for Women Entrepreneurs (2026)
Women borrowers often get slightly lower rates than men. Here's what to expect:
| Category | General Rate | Women Rate (Approx.) |
|---|---|---|
| Shishu (up to ₹50K) | 10-12% | 8.40-10% |
| Kishor (₹50K-5L) | 9-11% | 8.40-10.5% |
| Tarun (₹5L-10L) | 8.5-10.5% | 8.40-10% |
Note: Rates vary by bank. SBI, Bank of Baroda, and Canara Bank typically offer the most competitive rates for women borrowers.
EMI Examples
Shishu Loan: ₹50,000 at 10% for 3 years
- EMI: ₹1,613/month
- Total interest: ₹8,066
Kishor Loan: ₹3,00,000 at 9.5% for 5 years
- EMI: ₹6,298/month
- Total interest: ₹77,870
Tarun Loan: ₹10,00,000 at 9% for 5 years
- EMI: ₹20,758/month
- Total interest: ₹2,45,459
Eligibility for Women Entrepreneurs
Who Can Apply?
- Any Indian woman citizen aged 18+
- Running or planning to start a non-farm business
- Business should be income-generating (not charitable/non-profit)
- Existing business OR new venture
Types of Businesses Eligible
- Beauty parlour / salon
- Tailoring / boutique
- Food processing / catering / tiffin service
- Retail shop / general store
- Handicrafts / handloom
- Dairy farming (if processed products)
- Small manufacturing unit
- Service businesses (tutoring, accounting, design)
- E-commerce / online business
- Mobile repair / electronics shop
- Laundry / dry cleaning
- Healthcare clinic / pharmacy
- Transport services
- Agriculture-allied (food processing, not primary agriculture)
What's NOT Eligible
- Agriculture directly (loans available under other schemes)
- Non-income generating activities
- Self-consumption purposes
- Businesses involved in illegal activities
How to Apply: Step-by-Step
Method 1: Through Bank Branch (Most Common)
Step 1: Choose Your Bank Major banks offering Mudra Loans:
- SBI, PNB, Bank of Baroda, Canara Bank, Union Bank
- HDFC Bank, ICICI Bank, Axis Bank
- Regional Rural Banks
- Cooperative banks
Step 2: Prepare Documents
| Document | For Shishu | For Kishor/Tarun |
|---|---|---|
| Identity proof (Aadhaar) | ✅ | ✅ |
| Address proof | ✅ | ✅ |
| PAN card | Recommended | ✅ |
| Passport-size photos (2) | ✅ | ✅ |
| Business plan / proposal | Basic (1 page) | Detailed |
| Business registration (if existing) | If available | ✅ |
| Bank statement (6 months) | Not required | ✅ |
| Income proof / ITR | Not required | Last 2 years |
| Quotation for machinery/equipment | If applicable | ✅ |
| Caste certificate (SC/ST/OBC) | If applicable | If applicable |
Step 3: Visit the Branch
- Go to the nearest branch of your chosen bank
- Ask for the Mudra Loan application form
- Fill the form and submit with documents
- Some banks have a dedicated "MUDRA desk"
Step 4: Verification
- Bank verifies your documents and business viability
- May visit your business premises (for existing businesses)
- Credit check (CIBIL score helps but isn't strict for Shishu)
Step 5: Sanction & Disbursement
- Shishu loans: 7-15 days
- Kishor loans: 15-30 days
- Tarun loans: 30-45 days
- Amount credited to your bank account or Mudra Card issued
Method 2: Online Application
Udyamimitra Portal (udyamimitra.in)
- Visit udyamimitra.in
- Register with mobile number + OTP
- Fill loan application
- Upload documents
- Choose bank/NBFC
- Submit , application forwarded to bank
- Bank contacts you within 7-10 days
PSBLOANSIN59MINUTES (psbloansin59minutes.com) For Kishor and Tarun loans:
- Register on psbloansin59minutes.com
- Link your GST, ITR, and bank account
- Get in-principle approval within 59 minutes
- Bank processes the loan after approval
Method 3: Through Microfinance Institutions (MFIs)
For women in rural areas or without bank accounts:
- Bandhan Bank, Bharat Financial, SKS Microfinance
- Self-Help Groups (SHGs) , get Mudra loans through group lending
- MFI interest rates may be slightly higher (12-15%)
Mudra Card: How It Works
The Mudra Card is a debit card linked to your Mudra Loan working capital:
- Works like a business credit card
- Withdraw funds as needed (not the entire loan at once)
- Interest charged only on the amount used
- Reduces interest burden significantly
- Can be used at ATMs and POS machines
- Available for Kishor and Tarun loans
Example: You have a ₹3 lakh Kishor loan with Mudra Card. In month 1, you withdraw ₹50,000 for raw materials. You pay interest only on ₹50,000, not ₹3 lakh. Next month, you withdraw ₹30,000 more. Interest now on ₹80,000. This saves significant money.
Tips to Get Your Mudra Loan Approved
1. Business Plan Matters (Especially for Kishor/Tarun)
Even a simple 2-3 page business plan helps:
- What your business does
- Who your customers are
- How much you need and what for (equipment, inventory, working capital)
- Expected monthly income and expenses
- How you'll repay the loan
2. CIBIL Score
- Shishu: Score not strictly checked (but helps)
- Kishor/Tarun: Score above 650 significantly improves chances
- No credit history is okay for first-time borrowers
- If your score is low, explain why (medical emergency, etc.)
3. Start with Shishu
If you're new to business:
- Apply for Shishu first (₹50,000)
- Repay on time for 6-12 months
- Apply for Kishor (₹5 lakh) with repayment track record
- Build up to Tarun (₹10 lakh)
4. Choose the Right Bank
- If you have a savings account with a bank, apply there first
- Public sector banks are more receptive to Mudra loans
- SBI and Bank of Baroda process the highest number of Mudra loans
5. Know Your Rights
- Banks CANNOT refuse Mudra Loan without valid reason
- No collateral can be demanded
- No bribes should be paid (report corruption to mudra.org.in)
- Complaints: Call Mudra helpline or write to bank's grievance cell
What If Your Loan Is Rejected?
Common Reasons for Rejection
- Low CIBIL score (existing loan defaults)
- Incomplete documentation
- Business plan not convincing
- Previous loan from same bank in default
- Mismatch in information
Steps After Rejection
- Ask for written reason for rejection
- Fix the issue (improve documents, clear old dues)
- Apply at a different bank , each bank evaluates independently
- Apply through MFI or NBFC , more flexible than banks
- Grievance portal: Write to bank's nodal officer or Banking Ombudsman
Success Stories: Women Entrepreneurs on Mudra Loans
Lakshmi, 32, Beauty Salon in Coimbatore
"₹50,000 Shishu loan se apna salon start kiya. First year mein hi repay kar diya. Ab Kishor loan se second salon open kiya." Revenue: ₹40,000/month.
Fatima, 28, Tiffin Service in Hyderabad
"₹2 lakh Kishor loan liya , commercial kitchen equipment aur packaging ke liye. 30 customers se start kiya, ab 150+ hain." Revenue: ₹1.2 lakh/month.
Rekha, 45, Handicraft Export in Jaipur
"Tarun loan of ₹10 lakh helped me set up an export unit. Now I employ 12 women artisans from my village." Revenue: ₹3 lakh/month.
Related Schemes for Women Entrepreneurs
| Scheme | Loan Amount | Special Feature |
|---|---|---|
| Stand-Up India | ₹10L - ₹1Cr | SC/ST/Women , at least 1 per branch |
| CGTMSE | Up to ₹5Cr | Free collateral guarantee |
| Mahila Udyam Nidhi | Up to ₹10L | SBI scheme for small enterprises |
| Stree Shakti Package | Up to ₹5L | 0.5% interest concession for women |
| Annapurna Scheme | Up to ₹50,000 | For food catering business |
Frequently Asked Questions (FAQ)
Can I get Mudra Loan for online business/e-commerce?
Yes. Online businesses, dropshipping, e-commerce stores, digital marketing agencies, and freelancing businesses are all eligible. You need to show that it's an income-generating activity.
Do I need GST registration for Mudra Loan?
Not for Shishu loans. For Kishor and Tarun, some banks may ask for GST registration, especially if your turnover requires it. Udyam/MSME registration (free) is recommended for all categories.
Can a housewife with no income get Mudra Loan?
Yes, for starting a new business. You don't need existing income or salary. What you need is a viable business idea and basic documents (Aadhaar, PAN). Shishu loans (up to ₹50,000) are specifically designed for first-time entrepreneurs.
What happens if I can't repay?
Contact your bank immediately if you're facing repayment difficulty. Banks can restructure the loan (extend tenure, reduce EMI). Defaulting hurts your CIBIL score and future borrowing capacity. Never ghost your bank , communicate.
Can I take Mudra Loan from multiple banks?
Yes, technically , but the total across all banks should not exceed ₹10 lakh. Also, multiple loan applications may flag your credit profile. Better to apply for one adequate loan from one bank.
Conclusion
Mudra Loan is the most accessible business funding option for Indian women entrepreneurs. Zero collateral, priority processing, and loans from ₹50,000 to ₹10 lakh , whether you want to start a tiffin service or expand your boutique, the funding is there.
The government has created the scheme. Banks are mandated to lend. The only missing piece is your application.
Sapna hai? Mudra Loan hai. Bas apply karo.
Rates and processes as of April 2026. Visit mudra.org.in or your nearest bank for current details.