Choose the PMMY category from the amount genuinely required and the business stage—not the largest label available. Current official categories include Shishu, Kishor, Tarun, and Tarun Plus; Tarun Plus has a specific prior-Tarun successful-repayment condition.
Use the current official category bands
The Department of Financial Services lists Shishu up to ₹50,000; Kishor above ₹50,000 and up to ₹5 lakh; Tarun above ₹5 lakh and up to ₹10 lakh; and Tarun Plus above ₹10 lakh and up to ₹20 lakh for entrepreneurs who previously availed and successfully repaid a Tarun-category loan, effective October 24, 2024.
Build the amount from the business use
Separate machinery, inventory, working capital, fit-out, licence, digital equipment, and contingency. Attach quotes or a cash-cycle calculation. Asking for a round maximum without explaining deployment weakens the application and can create excess repayment pressure.
| Category | Official amount band | Planning question |
|---|---|---|
| Shishu | Up to ₹50,000 | Is this a small launch or tool/inventory gap? |
| Kishor | Above ₹50,000 to ₹5 lakh | Can the operating business support the instalment? |
| Tarun | Above ₹5 lakh to ₹10 lakh | Are quotes, registrations and cash flow lender-ready? |
| Tarun Plus | Above ₹10 lakh to ₹20 lakh | Was the previous Tarun loan successfully repaid? |
Do not confuse scheme access with automatic approval
PMMY defines an institutional credit framework for eligible micro-enterprise purposes through member lending institutions. The lender still assesses the borrower, business viability, documents, repayment capacity, and applicable policy. “Collateral not required” in the official scheme description does not mean no underwriting or no primary asset/security documentation.
Compare the actual offer
Read the KFS or equivalent loan disclosure, APR, net disbursement, repayment schedule, moratorium if any, and charges. Verify that the sanctioned purpose and payment flow match the business purchase. Avoid private sites charging to “register” or guarantee a MUDRA sanction.
Keep proof after disbursement
- Quotes, invoices and asset serials.
- Supplier payment trail.
- Stock or working-capital records.
- Repayment receipts and closure documents.
- Written lender communications.
Official references
- Department of Financial Services — PMMY — current purpose, categories, Tarun Plus condition and member lenders.
- MUDRA — official scheme and institutional information.
- RBI — Key Facts Statement — cost and repayment disclosure for covered term loans.