Shishu mudra loan, Kishor, Tarun and Tarun Plus: the four Mudra categories explained

The four Mudra loan categories at a glance

A Shishu mudra loan is one of four categories. Every Mudra loan falls into one of them, set only by the amount. The category does not change who lends to you, and it does not change the basic rules. It changes the paperwork and, for the top category, who may apply.

The official site spells the second category "Kishor". You will also see "Kishore" on bank pages and in Mudra's own older text. They are the same category (Mudra loan categories).

Mudra itself does not lend. It refinances the banks, small finance banks, NBFCs and microfinance institutions that do (Mudra performance data). Your lender decides the amount, the rate and whether to lend at all.

What a Shishu mudra loan is for

Shishu is the entry level. Mudra says the names mark "the stage of growth" of a micro business, and that more focus goes to Shishu units than to the higher categories (Mudra loan categories).

A Shishu loan suits a business that needs a small amount for a clear purpose: a first stock of goods, a tool, a sewing machine, a cart, a small repair. Because the amount is small, the process is lighter:

• One-page application. Mudra designed a single-page format for Shishu (Mudra FAQ).
• Quicker processing. Mudra's FAQ says a Shishu proposal is normally processed in 7 to 10 days once the lender has complete information (Mudra FAQ). This is a guide, not a promise: each lender works to its own timeline.
• Small-loan paperwork. Mudra notes that income-tax returns are generally not insisted on for small loans (Mudra FAQ).

By number, Shishu is by far the largest category. Up to 21-Mar-2025, 78% of all Mudra loans were Shishu loans, though they made up 35% of the money sanctioned (PIB press release, 08-Apr-2025).

Kishor mudra loan: for a business that is already running

Kishor covers loans above ₹50,000 and up to ₹5,00,000 (Mudra loan categories). It is the category with the largest share of money: 40% of the amount sanctioned up to 21-Mar-2025, across 20% of loans (PIB press release, 08-Apr-2025).

A Kishor loan typically funds a step up: more stock, a second machine, a small vehicle for deliveries, a shop fit-out. Lenders use a longer, three-page indicative form at this level (Mudra FAQ). Expect to show how the business runs today, through bank statements, bills or GST returns where you have them. The Mudra documents guide lists what lenders usually ask for.

Tarun mudra loan: the larger established business

Tarun covers loans above ₹5,00,000 and up to ₹10,00,000 (Mudra loan categories). Up to 21-Mar-2025, Tarun was 2% of loans by number but 25% of the money sanctioned (PIB press release, 08-Apr-2025).

At this size the lender reads the business closely: cash flow, existing debts, how the money will be used and how it will be repaid. The repayment schedule is set by the lender from the business's cash flow, not by the scheme (Mudra FAQ).

A Tarun loan also matters for the future. It is the only path into Tarun Plus.

What changed: the Tarun Plus category

Tarun Plus is the newest category. The Union Budget 2024-25 announced it on 23-Jul-2024, and it took effect on 24-Oct-2024 (PIB press release, 08-Apr-2025).

• Amount: above ₹10,00,000 and up to ₹20,00,000 (Mudra loan categories).
• Who can apply: only an entrepreneur who has already taken a loan in the Tarun category and repaid it successfully (Mudra FAQ).
• Guarantee: the Credit Guarantee Fund for Micro Units (CGFMU), the fund behind Mudra loans, extended its cover to Tarun Plus (PIB press release). NCGTC, which runs CGFMU, states that loans above ₹10,00,000 to ₹20,00,000 qualify only for borrowers who repaid a Tarun loan (NCGTC CGFMU FAQ).

Many websites still show three categories and a ₹10,00,000 ceiling (PIB press release, 08-Apr-2025). That is out of date. If a branch tells you Mudra stops at Tarun, ask about Tarun Plus by name, and keep the closure letter of your Tarun loan as proof that it was repaid.

Which Mudra category should you choose?

You do not pick a category the way you pick a product. The category follows from the amount you need.

1. Work out the amount first. List what the money will buy and what it will earn. A lender reads the purpose before the number.
2. The amount sets the category. Up to ₹50,000 is Shishu. Above that and up to ₹5,00,000 is Kishor. Above ₹5,00,000 and up to ₹10,00,000 is Tarun (Mudra loan categories).
3. Above ₹10,00,000, check your history. Tarun Plus needs a repaid Tarun loan (Mudra FAQ). Without one, a loan above ₹10,00,000 is not a Mudra loan. You would look at an ordinary business loan or another scheme instead.
4. Do not stretch or split the ask. Asking for more than the business needs, or splitting one need across lenders, makes the file harder to approve. Total Mudra borrowing at any time must stay within the scheme limit (NCGTC CGFMU FAQ).

If you are not sure how a lender will see your business, the free loan readiness check shows where your file is strong and weak before you choose an amount.

Can you move from Shishu to Kishor later?

Yes, in practice. Mudra describes the categories as "a reference point for the next phase of graduation", so moving up is the design (Mudra loan categories). The scheme sets no waiting period between Shishu and Kishor, or between Kishor and Tarun. The next loan is a fresh decision by your lender, based on how the business has grown and how you repaid.

Two rules still apply:

• Total limit. You can hold a Mudra loan and seek another, even from a different lender, if you are eligible and the total stays within the scheme's maximum (NCGTC CGFMU FAQ).
• Tarun Plus is the exception. It is the only category with a stated condition: a repaid Tarun loan (Mudra FAQ).

A clean repayment record on the first loan is what makes the second one easier. Lenders check it.

Rules that are the same in every category

Rates and charges differ by lender, not by category name. The Mudra interest rate guide shows how lenders price these loans, and the Mudra loan EMI calculator helps you test a repayment.