MUDRA Loan in AP is the collateral-free bank loan for small businesses under the Pradhan Mantri MUDRA Yojana — loans from Rs 50,000 up to Rs 20 lakh, with no security needed.

If you run a small shop, a tailoring unit, a food stall or any other micro-enterprise, a MUDRA loan can give you the working capital or the equipment you need. Here is how the scheme works in Andhra Pradesh.

What Is a MUDRA Loan?

MUDRA stands for Micro Units Development and Refinance Agency. Under the Pradhan Mantri MUDRA Yojana, banks, NBFCs and micro-finance institutions give loans to non-farm small and micro enterprises — manufacturing, trading and services. The loans are collateral-free, which means you do not need to pledge property or gold to get one.

The MUDRA Loan in AP is given by all banks in the state, including public sector banks, private banks, regional rural banks and cooperative banks. You can apply at the bank branch or online on the JanSamarth portal at jansamarth.in, which is the government’s portal for scheme loans. The Udyamimitra portal at udyamimitra.in also helps with MUDRA loan applications.

MUDRA Loan Categories: Shishu, Kishore, Tarun and Tarun Plus

The MUDRA loan is divided into four categories by amount:

• Shishu: loans up to Rs 50,000 — for starting a very small business or for working capital.
• Kishore: loans from Rs 50,001 to Rs 5 lakh — for a growing business that needs more capital.
• Tarun: loans from Rs 5 lakh to Rs 10 lakh — for an established business that wants to expand.
• Tarun Plus: loans from Rs 10 lakh to Rs 20 lakh — for borrowers who have repaid a Tarun loan successfully.

Choose the category that fits your need. A new business usually starts with Shishu or Kishore, and moves to Tarun as it grows. The interest rate is set by the lending bank and varies by category and by bank — ask the bank for the current rate before applying.

Who Can Apply for a MUDRA Loan in AP?

These conditions apply for a MUDRA Loan in AP:

• You must be an Indian citizen.
• You must run, or plan to start, a non-farm micro or small enterprise — manufacturing, trading or services.
• You must be 18 years or older.
• You must not be a defaulter of any bank or financial institution.

There is no minimum income and no educational qualification for a MUDRA loan. Allied agriculture activities such as dairy, poultry and beekeeping are also covered. Farm crop loans are not covered by MUDRA — for those, read our guide to the Kisan Credit Card.

Documents Required for a MUDRA Loan

Keep these ready before you apply:

• Aadhaar card and PAN card.
• Proof of address — Aadhaar, voter ID or electricity bill.
• Proof of business — shop registration, Udyam registration or trade licence, if available.
• Bank statement of the last six months.
• Quotation for the machinery or equipment to be purchased, if any.
• Project report or business plan, for larger loans.

For a Shishu loan, the documents are minimal — usually just Aadhaar, PAN and the bank account details. For Kishore and Tarun, the bank will ask for more documents, including the project report.

How to Apply for a MUDRA Loan in AP

Follow these steps to apply for a MUDRA Loan in AP:

1. Decide the loan category — Shishu, Kishore, Tarun or Tarun Plus — based on the amount you need.
2. Visit the nearest bank branch or apply online on the JanSamarth portal at jansamarth.in.
3. Fill the MUDRA loan application form and submit the documents.
4. The bank will check your credit history and the business plan.
5. If approved, the loan is sanctioned and the amount is credited to your account.
6. For working capital, you may get a MUDRA card — a RuPay debit card that lets you draw the working capital as needed.

Do not pay any agent or middleman for a MUDRA loan — the application is free, and the bank does not charge a processing fee for a Shishu loan. If anyone asks for money to get the loan sanctioned, report it to the bank manager. Ask at your Village or Ward Secretariat for the nearest bank branch.

What Is the MUDRA Card?

When a MUDRA loan is given for working capital, the borrower may receive a MUDRA card — a RuPay debit card linked to the working capital loan account. The card lets the borrower draw money as and when it is needed, instead of taking the full amount at once. This is useful for a shop or a small unit that needs cash in small amounts over time. The card can be used at ATMs and at shops that accept RuPay cards. Interest is charged only on the amount drawn, not on the full sanctioned amount, which saves money. Ask the bank for a MUDRA card when you take a working capital loan under MUDRA.

MUDRA Loan vs PMEGP Loan

People often ask whether to take a MUDRA loan or a PMEGP loan. They are different. A MUDRA loan is a plain bank loan with no subsidy, but it is faster and can be used for an existing business. PMEGP gives a subsidy of 15% to 35% of the project cost, but it is only for new units and the process is longer. If you are starting a new unit and can wait, PMEGP is better because of the subsidy — read our guide to PMEGP in AP. If you need money quickly or already run a business, a MUDRA loan is the simpler option.

Common Problems and Solutions

Bank rejects the loan: ask for the reason in writing — it is often a poor credit history or an incomplete application. Loan delayed: follow up with the bank branch with the application number. Asked to pay an agent: do not pay — the application is free, and you can complain to the bank manager. Wrong category: if the bank gives a smaller category than you need, re-apply with a better project report. Repayment problem: talk to the bank early — it may restructure the loan rather than declare it a default.

Frequently Asked Questions About the MUDRA Loan in AP

What is the maximum MUDRA loan amount?

Rs 20 lakh, under the Tarun Plus category. Shishu is up to Rs 50,000, Kishore is up to Rs 5 lakh, and Tarun is up to Rs 10 lakh.

Is any security needed for a MUDRA loan?

No. MUDRA loans are collateral-free — you do not need to pledge property or gold.

Can I apply for a MUDRA loan online?

Yes. Apply on the JanSamarth portal at jansamarth.in or on the Udyamimitra portal, or visit the nearest bank branch.

Is there a subsidy in a MUDRA loan?

No. A MUDRA loan has no subsidy — it is a plain bank loan. If you want a subsidy, look at PMEGP instead.

Final Word

The MUDRA Loan in AP is the simplest way for a small business to get a collateral-free loan — from Rs 50,000 for a start-up to Rs 20 lakh for an expanding business. Apply at your bank or on JanSamarth, keep the documents ready, and do not pay any agent. For the wider picture of schemes this year, see our guide to Andhra Pradesh schemes in August 2026.

Last updated: November 2026