Mudra Kishor Loan: Eligibility, Limit and How to Apply
Reviewed by: WeCredit Research Team
A Mudra Kishor loan is a collateral-free loan of more than Rs. 50,000 and up to Rs. 5 lakh under Pradhan Mantri Mudra Yojana (PMMY). It suits a small non-farm business that is starting up or needs money for working capital or a modest expansion, and you apply to a bank, NBFC or microfinance lender, not to MUDRA itself.
Quick answer: Kishor is the second of four Mudra categories and covers loans above Rs. 50,000 up to Rs. 5 lakh. It is the category that holds the largest share of Mudra money, 43 percent of the amount sanctioned. Interest rates and fees are set by each lender under RBI guidelines. WeCredit does not sanction government scheme loans, so confirm every detail with the lender and on the official sources listed at the end.
Kishor Loan at a Glance
| Item | Detail |
|---|---|
| Loan amount | Above Rs. 50,000 and up to Rs. 5 lakh |
| Scheme | Pradhan Mantri Mudra Yojana (PMMY), launched 8 April 2015 |
| Security | Collateral-free; PMMY loans up to Rs. 20 lakh are described as collateral-free |
| Who it is for | Non-corporate, non-farm micro and small businesses, new or running, that need working capital or a modest expansion |
| Who lends | Scheduled commercial banks, regional rural banks, small finance banks, NBFCs and microfinance institutions |
| Interest rate and fees | Set by each lender under RBI guidelines; the official pages state no single rate |
| Guarantee support | Credit Guarantee Fund for Micro Units, administered by NCGTC |
| Where to apply | A lender branch, the Udyamimitra portal or the JanSamarth portal |
What Kishor Means Inside the Mudra Scheme
PMMY gives collateral-free credit of up to Rs. 20 lakh for non-corporate, non-farm income-generating activities in manufacturing, trading and services, including allied agriculture such as poultry, dairy and beekeeping. The loan is split into four categories by the amount you borrow. A PIB explainer of 8 April 2026 says Kishor is meant for new enterprises and for units already running that need extra funds for stabilisation, working capital or modest expansion. If you need Rs. 50,000 or less, the Mudra Shishu loan is the smaller step below it.
Kishor carries real weight in the scheme. A PIB release of 8 April 2026, with data as on 27 March 2026, shows Kishor made up 24 percent of all PMMY loans but 43 percent of the amount sanctioned, because each loan is larger than a Shishu loan. The same release records 2.79 crore Kishor accounts opened by new entrepreneurs, with Rs. 5.09 lakh crore sanctioned to them, and Rs. 6.22 lakh crore disbursed to women borrowers under Kishor.
| Category | Loan amount | Share of loans | Share of amount |
|---|---|---|---|
| Shishu | Up to Rs. 50,000 | 74% | 32% |
| Kishor | Above Rs. 50,000 and up to Rs. 5 lakh | 24% | 43% |
| Tarun | Above Rs. 5 lakh and up to Rs. 10 lakh | 2% | 25% |
| Tarun Plus | Above Rs. 10 lakh and up to Rs. 20 lakh | 0.004% | 0.095% |
The MUDRA website spells the category as “Kishore”, so you may see both spellings on forms and lender pages. They mean the same category.
Who Is Eligible for a Kishor Loan
The official pages describe PMMY borrowers as non-corporate, non-farm micro and small enterprises in manufacturing, trading, services and allied agricultural activities. They do not publish a separate Kishor eligibility test, so the lender applies its own credit checks within these scheme limits. In practice that means three things matter: the business must be a non-farm, non-corporate activity, the amount you need must fall in the Kishor band, and the lender must be satisfied that you can repay.
Examples of activities that fit the scheme wording include a retail or trading shop, a workshop or small manufacturing unit, a service business such as a salon or repair shop, a food business, equipment finance, and commercial transport such as auto rickshaws, small goods vehicles and e-rickshaws. The scheme is for non-farm and non-corporate activity, so crop farming and corporate borrowers are outside it.
You do not need to have borrowed a Shishu loan first. PIB records 2.79 crore Kishor accounts opened by new entrepreneurs, so first-time borrowers do take Kishor loans directly. Whether a lender asks for a Shishu repayment history first is its own call.
Who Lends and What Backs the Loan
Kishor loans are given by member lending institutions: scheduled commercial banks, regional rural banks, small finance banks, NBFCs and microfinance institutions. MUDRA, the Micro Units Development and Refinance Agency, refinances these lenders and does not lend to you directly. The MUDRA website states that there are no agents or middlemen engaged by MUDRA for availing of Mudra loans and advises borrowers to keep away from people posing as MUDRA agents.
The lender is protected by the Credit Guarantee Fund for Micro Units, run by the National Credit Guarantee Trustee Company. PIB says this guarantee reduces the lender’s credit risk, which supports collateral-free lending. It does not make approval automatic. The lender still reviews your business, your repayment capacity and your papers, and it can decline.
Documents Lenders Usually Ask For
There is no single national document list for Mudra loans, so each lender sets its own. For a Kishor loan, where the amount is larger than Shishu, expect a somewhat fuller file:
- Aadhaar and PAN of the applicant, and of partners or directors if the unit is a partnership
- Address proof for the home and for the business place, such as a utility bill or rent agreement
- Proof the business exists or will exist: Udyam registration, shop licence, GST registration if applicable, or a partnership deed
- Bank statements for the last six to twelve months for a running business
- Passport-size photographs
- A short business plan or project note: what you sell, expected monthly sales, cost of the machine or stock
- A quotation or proforma invoice for any machine, vehicle or equipment you plan to buy
Ask the branch for its exact list before you go. A missing paper can hold up the file.
How to Apply: Step by Step
There are three practical routes. You can walk into a branch of a bank, NBFC or microfinance lender. You can apply online through the Udyamimitra portal named on the MUDRA website. Or you can use JanSamarth, the national portal for credit-linked schemes, which PIB says integrates Mudra loans. Our JanSamarth portal registration steps explain how that route works.
- Decide the amount and what it will buy. It should be above Rs. 50,000 and no more than Rs. 5 lakh for Kishor.
- Collect your documents and write a one-page plan with expected sales, costs and the EMI you can afford.
- Choose a lender. A bank where you already hold a current or savings account can see your transactions and is often easier to approach.
- Ask for a Mudra loan in the Kishor category and submit the form at the branch, on Udyamimitra or on JanSamarth.
- Answer the lender’s questions and allow a visit to your business place if the lender asks.
- Read the sanction letter. Check the interest rate, repayment period, EMI, processing charges and any insurance before you sign.
- Use the money only for the stated business purpose and repay on schedule.
Never pay an agent to arrange a Mudra loan. MUDRA has said it uses no agents or middlemen.
Worked Example: A Rs. 2 Lakh Kishor Loan
Say a tailor wants Rs. 2,00,000 for two industrial machines and fabric stock. The interest rate here is an assumption for illustration only, because real rates differ by lender and change over time. At an assumed 12 percent a year over 36 months, the EMI works out to about Rs. 6,643. Over three years the tailor repays about Rs. 2,39,143, of which about Rs. 39,143 is interest. Stretching the same loan to 60 months lowers the EMI to about Rs. 4,449, but total repayment rises to about Rs. 2,66,933 and interest to about Rs. 66,933. A shorter term saves money overall, a longer term eases the monthly burden. Choose the EMI your sales can carry in a slow month, not only a good one.
Is Kishor Right for You? Checklist
- Is your business non-farm and run as an individual, partnership or small unit rather than a company? If yes, continue.
- Do you need more than Rs. 50,000 but not more than Rs. 5 lakh? If you need less, look at Shishu. If you need more, look at Tarun.
- Can you do without collateral? Kishor is built for that, but the lender still checks repayment ability.
- Can you show the lender some proof of the business and a record of bank transactions?
- Do you have a quotation or clear plan for how the money will be used?
- Will your monthly earnings cover the EMI with room to spare?
Common Rejection Reasons and Fixes
These are common patterns, not an official list. Each lender decides its own cases.
| Common reason | What to do |
|---|---|
| Activity is farming or the applicant is a registered company | Check that the business is non-farm and non-corporate before you apply |
| Amount does not match the plan | Tie the amount to a quotation or costed plan, and pick the right category |
| Name or address differs across documents | Correct Aadhaar, PAN and bank records first |
| No proof the business exists | Get Udyam registration, a shop licence or other proof the lender accepts |
| Overdue loans or missed EMIs | Clear dues and ask the lender what it needs to reconsider |
| Weak account activity | Route sales through the bank account for a few months and reapply |
| EMI too high for income | Ask for a smaller amount or a longer term |
How to Improve Your Chances of Approval
Lenders decide Kishor loans one by one, so a clean and complete application helps. These habits are general good practice, not scheme rules.
- Ask for an amount that matches a clear need, and attach a quotation.
- Keep Aadhaar, PAN, mobile number and bank details consistent and linked.
- Run daily sales through a bank account for a few months so the lender can see regular income.
- Clear overdue EMIs and card dues before you apply.
- Apply to one lender at a time. If you are declined, ask for the reason in plain words and fix it before you try another.
A repaid Kishor loan also builds a record. The Tarun Plus category, started on 24 October 2024, is meant for borrowers who have repaid earlier loans under Tarun, so steady repayment helps you move up the ladder.
Timeline: Key Dates for Kishor
| Date | Event |
|---|---|
| 8 April 2015 | PMMY launched with Shishu, Kishor and Tarun categories |
| 23 July 2024 | Union Budget 2024-25 announced raising the Mudra limit to Rs. 20 lakh |
| 24 October 2024 | New Rs. 20 lakh limit took effect; Tarun Plus added for borrowers who repaid Tarun loans |
| 27 March 2026 | PIB data date: 57.79 crore loans worth Rs. 40.07 lakh crore since launch |
When Another Scheme Fits Better
If your loan need is above Rs. 5 lakh, ask the lender about the Tarun category. If a lender wants collateral for a larger loan, a credit guarantee can help. The CGTMSE guarantee scheme is a related option you can ask your lender about.
| Scheme | What it gives | Best for |
|---|---|---|
| Mudra Kishor | Loan above Rs. 50,000 up to Rs. 5 lakh, collateral-free | Small non-farm units with a mid-size need |
| Mudra Shishu | Loan up to Rs. 50,000 | Very small or new units |
| Mudra Tarun | Loan above Rs. 5 lakh up to Rs. 10 lakh | Growing units |
Common Mistakes
- Paying an agent. MUDRA states it has no agents or middlemen, so apply directly.
- Assuming Kishor has a fixed national interest rate. Rates are set by each lender under RBI guidelines.
- Borrowing the full Rs. 5 lakh when a smaller amount would do.
- Applying under Kishor for an amount that belongs in Shishu or Tarun.
- Signing without reading the sanction letter for fees and the repayment schedule.
Frequently Asked Questions
What is the limit of a Kishor loan?
Above Rs. 50,000 and up to Rs. 5 lakh. Less than that falls under Shishu, and more falls under Tarun.
Is a Kishor loan collateral-free?
Yes. PMMY loans up to Rs. 20 lakh are described as collateral-free. The lender still checks that you can repay.
What is the interest rate on a Kishor loan?
It varies by lender. PIB states that the rate is governed by RBI guidelines and gives no single figure. Ask the lender for the rate in writing before you sign.
Who can apply for a Kishor loan?
A non-corporate, non-farm micro or small business in manufacturing, trading, services or allied agriculture, whether new or already running. Companies and crop farming are outside the scheme.
Do I need a Shishu loan before a Kishor loan?
No. You can apply for Kishor directly if your need is in the Kishor band and the lender accepts your plan.
Can I apply for a Kishor loan online?
Yes. The MUDRA website names the Udyamimitra portal, and PIB says JanSamarth integrates Mudra loans. You can also apply at a branch.
Is there a subsidy on a Kishor loan?
Mudra is a loan, not a grant. Ask the lender whether any interest benefit applies to your case before you rely on one.
Does WeCredit sanction Kishor loans?
No. WeCredit does not sanction government scheme loans. It explains how schemes work. Confirm current terms with the lender and on the official sources below.
Where to Go Next
To compare Kishor with other schemes for small businesses, browse the government loan schemes hub.
