SIDBI (Direct Financing)Working Capital Facility (CC / OD)Micro Enterprise (Investment ≤ ₹1 Cr)Verified: 2026-09-29

Pradhan Mantri MUDRA Yojana - Shishu Tier Loan

Primary Lending Institution:Small Industries Development Bank of India (SIDBI)

Collateral-free micro loan up to ₹50,000 at 0% processing fee for starting or running micro businesses.

Connected Central Government Scheme: Pradhan Mantri MUDRA Yojana - Shishu Tier (Micro Loans up to ₹50,000)View Government Scheme Guidelines →

Interest Rate8.50% – 10.00% (Subsidized MUDRA Rate)Linked to EBLR / MCLR / Risk

Loan Amount QuantumUp to ₹50,000Based on turnover & project cost

Repayment TenureUp to 5 years (with customized moratorium)With moratorium where applicable

Collateral SecurityStrictly Nil collateral; covered under Credit Guarantee Fund for Micro Units (CGFMU)

What's Missing: Crucial Fine-Print & Exclusion Gaps

Loan capped at ₹50,000; requires verifiable commercial activity; personal consumption strictly prohibited. Borrowers must not be defaulters with any financial institution.

Note: Eligo publishes these regulatory and commercial exclusions directly from bank product guidelines and CGTMSE rules to protect MSME applicants from unexpected fee debits or loan rejection surprises.

What is Pradhan Mantri MUDRA Yojana - Shishu Tier Loan?

Entry-tier collateral-free credit under Pradhan Mantri MUDRA Yojana designed for micro-entrepreneurs, small shopkeepers, fruit/vegetable vendors, and artisans starting or sustaining micro-enterprises.

Key Benefits & Features

Collateral-free credit up to ₹50,000; zero processing fee; accessible at all commercial banks, RRBs, and SFBs; MUDRA debit card issued for revolving cash withdrawals.

Government Subsidy & Credit Guarantee Coverage

100% Credit Guarantee under CGFMU; Zero collateral required

Enterprise Eligibility Criteria

Any Indian citizen with a viable micro-business plan in manufacturing, processing, trading, or service sector. No minimum educational qualification.

Business VintageNew & Existing units eligible

Min. Annual TurnoverTurnover proportionate

Processing FeeNil (Statutory 100% processing fee waiver by RBI/MoF)

Prepayment TermsZero prepayment penalty as per RBI guidelines

How to Apply (3 Verified Paths)

💼Path 1: Current Account Portal

Apply at bank home branch or on Udyamimitra portal.

🌐Path 2: Official FinTech / Govt Portal

Apply through Udyamimitra portal (udyamimitra.in) or JanSamarth portal.

🏢Path 3: SME Banking Center Walk-In

Visit nearest commercial bank, Regional Rural Bank (RRB), or Small Finance Bank branch.

Eligo does not collect business loan applications or financial data. Apply directly on the verified official domain:

Visit Official Portal↗

Documents Required Checklist

Aadhaar Card, Voter ID/PAN, Proof of business address/registration (if existing), 2 passport photos, Quotation of machinery/items to be purchased.

Frequently Asked Questions

What is the processing fee for MUDRA Shishu loans?

As per Ministry of Finance and RBI guidelines, lending institutions cannot charge any processing fee for MUDRA Shishu loans up to ₹50,000.

Can I get a MUDRA loan without collateral?

Yes. By law, no collateral or third-party guarantee can be demanded by any bank for MUDRA loans; they are guaranteed by CGFMU.

What is a MUDRA Card?

A MUDRA Card is a RuPay debit card linked to the MUDRA loan account allowing borrowers to withdraw working capital as needed from ATMs or swipe at merchant POS.

Can new start-up businesses apply for Shishu tier?

Yes, Shishu tier is specifically designed for greenfield ventures and self-employed individuals with zero prior business vintage.