Mudra Loan in Uttarakhand: Shishu, Kishore, Tarun and Tarun Plus Explained
A plain-language guide to Pradhan Mantri Mudra Yojana for small businesses in Uttarakhand: the four loan categories, who qualifies, documents and how to apply.
A Mudra loan in Uttarakhand is one of the simplest ways for a small shop, workshop, homestay or service business to raise funds without pledging property. The loans are given by banks, small finance banks, NBFCs and microfinance institutions under the Pradhan Mantri Mudra Yojana (PMMY), and they are available in every district from Dehradun to Pithoragarh.
This guide explains the four Mudra categories, who can apply, what documents banks ask for, and the mistakes that most often get applications rejected.
What is a Mudra loan?
Mudra stands for Micro Units Development and Refinance Agency. Mudra itself does not lend to you. It refinances the banks and other lenders that give small business loans under the scheme. For you as a borrower, a Mudra loan is simply a business loan from your bank that follows the PMMY rules: it is meant for income-generating, non-farm activity, and loans in the scheme are generally given without collateral.
The four Mudra categories
The loan amount decides the category:
| Category | Loan amount | Typical use |
|---|---|---|
| Shishu | Up to ₹50,000 | A first business: a tea stall, tailoring unit, small kiosk |
| Kishore | ₹50,000 to ₹5 lakh | Growing a shop, buying equipment, a small café or homestay upgrade |
| Tarun | ₹5 lakh to ₹10 lakh | Established units adding machinery or capacity |
| Tarun Plus | ₹10 lakh to ₹20 lakh | Borrowers who have taken and fully repaid an earlier Tarun loan |
Tarun Plus was added in October 2024, when the government doubled the Mudra ceiling from ₹10 lakh to ₹20 lakh. It is meant for entrepreneurs with a good repayment record under Tarun, so a new borrower usually starts in Shishu, Kishore or Tarun.
Who can apply in Uttarakhand?
- Proprietors, partnership firms and small companies running a non-farm business: trading, manufacturing or services
- Activities allied to agriculture such as dairy, poultry, beekeeping and fisheries
- New businesses with a sensible plan, as well as existing ones
- Applicants who are not defaulters with any bank
In Uttarakhand, common Mudra borrowers include homestay owners in the hills, shopkeepers in Haldwani and Rishikesh, taxi and tempo operators on yatra routes, beauty parlours and tailoring units, and small food processing units making local products.
Documents banks usually ask for
- KYC: PAN and Aadhaar of the applicant and partners
- Proof of business address and, for an existing business, Udyam registration and GST registration if applicable
- Bank statements for the last 6 to 12 months
- Quotations for machinery, equipment or furniture you plan to buy
- A short project report or business plan, especially for Kishore and Tarun loans
- ITRs and financial statements for existing businesses applying for larger amounts
Our home loan page has a separate checklist if you are also planning a house; keep the two applications separate.
How to apply
- Decide the amount and category. Ask only for what the plan needs; banks check that the loan matches the project.
- Prepare a one or two page plan. What you will buy, how much it costs, expected monthly income and how you will repay.
- Choose the lender. Public sector banks, private banks, regional rural banks and small finance banks all lend under PMMY. Your existing bank is usually the fastest route.
- Apply at the branch or online. Many banks accept online applications, but a branch visit for verification is common.
- Use the money as stated. Banks may inspect the asset or business after disbursal.
Common reasons Mudra applications get rejected
- A weak or missing business plan, or a loan amount far above what the business can repay
- Poor credit history or an existing default, even a small one on a credit card
- No banking track record for an existing business that deals mainly in cash
- Applying at a branch far from where the business operates
If you are just starting out, combine a Mudra loan with a state scheme. Uttarakhand's Mukhyamantri Swarozgar Yojana 2.0 offers margin money subsidy of 15% to 35% on eligible projects, which reduces what you finally repay.
Mudra loan or a regular business loan?
If you need more than ₹20 lakh, or you can offer property as security, a regular business loan or loan against property may give a longer tenure and a lower rate. For collateral-free credit above the Mudra limits, ask about CGTMSE-backed loans.
Need help? Tell us your business, the amount and your district on WhatsApp or through the form on this page. We check which lender suits your case and help you prepare the plan and documents. Our advice is free.
Source: limits as announced by the Government of India in October 2024. Check current terms with the lending bank before you apply.
Frequently asked questions
Is collateral required for a Mudra loan?
Mudra loans are generally given without collateral, but the bank assesses your business and repayment capacity before sanctioning.
What is the interest rate on a Mudra loan?
There is no single Mudra rate. Each bank sets its own rate based on its benchmark and your profile.
Can I get a Mudra loan to start a new business?
Yes. Shishu and Kishore loans are often used for new businesses, provided you have a clear plan and the bank is satisfied with your ability to repay.
Who is eligible for Tarun Plus?
Tarun Plus, for loans above ₹10 lakh up to ₹20 lakh, is meant for borrowers who have taken and successfully repaid an earlier Tarun loan.
Can a homestay owner get a Mudra loan?
Yes. Homestays are a service business, so furnishing, renovation and working capital can be funded under Mudra, subject to the bank's assessment.