If you’re a small business owner, entrepreneur, or self-employed professional looking for funding, the Pradhan Mantri MUDRA Yojana (PMMY) offers loans up to ₹10 lakh without collateral. But to get approved, you need a strong Project Report for MUDRA Loan that convinces the bank.
This step-by-step guide covers:
✅ What is MUDRA Loan & who is eligible?
✅ How to write a bank-approved MUDRA project report
✅ Key financial calculations & loan categories
✅ Common mistakes that lead to rejection
✅ Free MUDRA project report template (downloadable)
Let’s get started!
What is MUDRA Loan?
MUDRA (Micro Units Development & Refinance Agency) provides business loans under three categories:
| Loan Category | Amount | For Whom? |
|---|---|---|
| Shishu | Up to ₹50,000 | New startups, small vendors |
| Kishor | ₹50,001 to ₹5 lakh | Established small businesses |
| Tarun | ₹5 lakh to ₹10 lakh | Growing businesses needing expansion |
Key Benefits:
✔ No collateral required
✔ Low-interest rates (starting from ~8%)
✔ Easy documentation compared to traditional loans
Eligibility:
- Indian citizens aged 18+
- Small businesses, retailers, service providers, artisans
- No minimum credit score, but good repayment history helps
Why is a Project Report Needed for MUDRA Loan?
Banks require a project report to assess:
🔹 Business viability – Will your idea succeed?
🔹 Repayment capacity – Can you pay back the loan?
🔹 Loan purpose – How will you use the funds?
A well-prepared report increases approval chances significantly.
Key Sections of a MUDRA Loan Project Report
Follow this exact structure for bank approval:
1. Executive Summary (Most Important!)
- Business name, type (e.g., Kirana store, tailoring shop)
- Loan amount required (Shishu/Kishor/Tarun category)
- Brief about business model & revenue potential
Example:
*”Rohit Tailors seeks a ₹3 lakh MUDRA Kishor loan to purchase new sewing machines and expand operations. The business currently earns ₹25,000/month and will increase to ₹50,000/month post-expansion.”*
2. Promoter Details
- Name, age, address, contact details
- Business experience (if any)
- Aadhaar, PAN, and bank account details
3. Business Description
- Type of business (Retail/Manufacturing/Service)
- Products/services offered
- Location & business setup (Home-based/shop/rented space)
4. Market Potential & Demand
- Who are your customers? (Local market, online, B2B)
- Competitor analysis (What makes you unique?)
- Marketing strategy (How will you attract customers?)
Pro Tip: Use local market surveys or customer testimonials to strengthen credibility.
5. Financial Projections (Critical for Approval!)
A. Project Cost Breakdown
| Expense Head | Amount (₹) |
|---|---|
| Equipment Purchase | 2,00,000 |
| Working Capital | 1,00,000 |
| Total | 3,00,000 |
B. Means of Finance
| Source | Amount (₹) |
|---|---|
| Own Investment | 50,000 |
| MUDRA Loan | 2,50,000 |
C. Profit & Loss Forecast (Year 1)
| Month | Revenue (₹) | Expenses (₹) | Profit (₹) |
|---|---|---|---|
| 1 | 30,000 | 20,000 | 10,000 |
| 6 | 50,000 | 25,000 | 25,000 |
D. Loan Repayment Plan
- EMI amount (e.g., ₹10,000/month for 30 months)
- Cash flow analysis (Can you afford EMIs?)
6. Supporting Documents
Attach:
✅ Aadhaar & PAN
✅ Business proof (GST, Shop Act License if applicable)
✅ Bank statements (6 months)
✅ Quotations for machinery/equipment
5 Common MUDRA Project Report Mistakes (Avoid These!)
❌ Unrealistic revenue projections – Banks reject inflated numbers.
❌ No clear loan purpose – Specify if funds are for machines, stock, or working capital.
❌ Incomplete documents – Missing Aadhaar, PAN, or address proof delays approval.
❌ No repayment plan – Banks need to see EMI affordability.
❌ Poor presentation – Disorganized reports create a bad impression.
Fix: Use realistic numbers, proper formatting, and cross-check documents.
Free MUDRA Loan Project Report Template
Struggling to start from scratch? [Download our free MUDRA project report template] (Word/PDF) with:
✔ Pre-built financial tables
✔ Bank-approved structure
✔ Sample repayment plan
👉 [Click Here to Download]
DIY vs. Consultant – Which is Better?
- DIY (Do It Yourself) → Good for small loans (Shishu/Kishor). Use our free template.
- Hire a Consultant → Best for complex businesses (Tarun loans above ₹5 lakh). Cost: ₹3,000 – ₹10,000.
Final Tips to Get MUDRA Loan Approved
✅ Apply under the right category (Shishu/Kishor/Tarun)
✅ Keep financials realistic – Don’t overestimate profits.
✅ Maintain a good credit score (Preferably 650+)
✅ Meet the branch manager – Build trust before submitting.
Conclusion
A well-prepared MUDRA project report is your key to collateral-free funding. By following this guide, avoiding mistakes, and using our free template, you maximize approval chances.
