Introduction
Starting a small business in India often begins with a big idea—but no money. I was in the same situation a year ago, dreaming of opening a tailoring shop in my town in Uttar Pradesh. The biggest challenge? Capital. That’s when I came across the Pradhan Mantri Mudra Yojana (PMMY)—a government scheme designed for small entrepreneurs like me.
This blog is a real account of how I applied for, received, and used a Mudra Loan to start my business. I hope this helps others who are unsure or hesitant to take the first step.
What Is a Mudra Loan?
Before diving into my journey, here’s a quick overview. The Mudra Loan scheme offers loans up to ₹10 lakhs to non-corporate, non-farm small/micro enterprises. It’s divided into three categories:
- Shishu – Loans up to ₹50,000
- Kishor – Loans between ₹50,000 and ₹5 lakhs
- Tarun – Loans from ₹5 lakhs to ₹10 lakhs
Since I was starting small, I applied for the Shishu Loan.
Why I Needed the Loan
I had some basic tailoring skills and already had 2 regular customers. My goal was to open a small tailoring shop with:
- 2 new sewing machines
- An ironing table
- A cupboard for materials
- A small stock of thread, fabric, buttons, etc.
I estimated that I’d need around ₹45,000 to get started properly. I had no savings, so the Mudra Shishu Loan was my only hope.
How I Started the Application Process
Step 1: Gathering Information
I visited the nearby SBI branch and asked the bank manager about Mudra Loans. He gave me a printed list of documents required and a simple form to fill.
Step 2: Documents I Submitted
Here’s what I submitted:
- Aadhaar Card (for identity and address)
- PAN Card
- Udyam Registration (I registered my tailoring business online)
- Passport-size photo
- Business plan (I wrote 1-page on how I’d use the ₹45,000)
- 6 months’ bank statement
Step 3: Filling the Form
The application form asked for basic details:
- Name, address
- Nature of business
- Loan amount required
- Purpose of loan
I submitted everything in one go and got a receipt.
Bank Verification & Waiting Period
The branch manager told me it would take 7–10 days for processing. I got a verification call from the bank and a site visit by their staff to confirm that I really intended to start the shop.
Since I had mentioned that I would work from a rented shop, I showed them the rental agreement and my shop location.
Loan Approval and Disbursement
On the 9th working day, I got a call: “Your loan has been approved.”
- Sanctioned amount: ₹45,000
- Repayment period: 24 months
- Interest rate: ~9%
- No collateral required
The loan amount was directly credited to my business account.
How I Used the Loan
Here’s how I used the ₹45,000:
| Item | Cost (₹) |
|---|---|
| Sewing Machines (2) | 22,000 |
| Ironing Table | 3,000 |
| Inventory (threads, fabrics) | 10,000 |
| Cupboard + Mirror | 4,000 |
| Shop Rent Advance | 6,000 |
Everything added up perfectly. I started operations within a week of receiving the loan.
Results After 3 Months
Within the first month, I had 10 regular customers. By month three:
- Monthly revenue: ₹22,000–₹28,000
- Profit after expenses: ~₹12,000/month
- EMI: ₹2,100/month
I never missed an EMI and reinvested profits into upgrading my tools and marketing.
Challenges Faced
- Initial confusion: Bank staff wasn’t very helpful in explaining things.
- Paperwork: Needed help filling out the business plan.
- Site inspection: Felt nervous during the physical verification.
But with patience and a clear plan, I managed to overcome these.
Tips for First-Time Applicants
- Have a real business plan, even if it’s small.
- Visit public sector banks—they are more likely to offer Mudra Loans.
- Register your business on the Udyam portal—it improves credibility.
- Keep your bank account active—show regular activity.
- Be polite but persistent—follow up with the bank after application.
Final Thoughts
Getting the Mudra Shishu Loan was the turning point for me. It gave me confidence, capital, and a sense of ownership. Today, my tailoring shop is doing well, and I’m even thinking about hiring a part-time assistant.
If you’re serious about your small business dream in India, the Mudra Loan is a fantastic way to start.
Don’t wait for the perfect moment—apply, plan smart, and get started.