If you’re a small business owner or planning to start your own venture in India, getting financial support is one of the most important first steps. The Government of India has introduced various loan schemes to help small businesses grow — and one of the most popular among them is the Mudra Loan under the Pradhan Mantri Mudra Yojana (PMMY).

But did you know that having a Udyam Certificate can boost your chances of getting a Mudra Loan?

In this article, we’ll explain how Udyam registration online makes you eligible for a Mudra Loan, what the benefits are, and how to apply.

What Is a Mudra Loan?

The Pradhan Mantri Mudra Yojana (PMMY) is a government scheme launched in 2015 to provide easy business loans to non-corporate, non-farm small/micro enterprises. These loans are given by banks, NBFCs, and micro-finance institutions.

There are three categories of Mudra Loans:

1. Shishu – Loans up to ₹50,000 (for startups or new businesses)

2. Kishor – Loans from ₹50,001 to ₹5 lakh (for growing businesses)

3. Tarun – Loans from ₹5 lakh to ₹10 lakh (for business expansion)

These loans require no collateral, have low-interest rates, and are designed to help small businesses succeed.

What Is Udyam Registration?

Udyam Registration is an online system started by the Ministry of MSME to register all Micro, Small, and Medium Enterprises (MSMEs) in India. It replaces the older Udyog Aadhaar system and provides a unique identification number to businesses.

You can complete udyam registration online in just a few minutes by providing:

• Aadhaar number

• PAN card

• Business details (name, address, activity, etc.)

• Bank account info

Once registered, you get a Udyam Certificate, which proves your MSME status and helps you access government benefits, including easy loans like Mudra.

How Udyam Registration Helps You Get a Mudra Loan

Let’s break down how having an Udyam Certificate increases your chances of getting a Mudra Loan:

1. Official MSME Recognition

With Udyam Registration, your business is officially recognized by the government as an MSME. This is one of the key eligibility criteria that lenders look for when approving Mudra Loans.

• Being registered shows that you’re a legitimate business

• Increases trust for banks and NBFCs

• Makes your loan file stronger and more credible

2. Easier Loan Approval Process

Banks prefer lending to businesses that are organized and registered. When you show your Udyam Certificate during your loan application:

• Your business data is already verified on the government portal

• Your activity type and turnover are clear

• There is less paperwork for the bank

3. Access to Collateral-Free Loans

Mudra Loans are collateral-free, and Udyam-registered businesses are already listed under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.

• No need to submit property or security

• Get funding without risking your assets

• Ideal for women entrepreneurs, artisans, traders, and service providers

4. Lower Interest Rates

Many banks offer preferential interest rates for MSMEs registered under Udyam. This means you may get a Mudra Loan at a lower interest rate than a non-registered applicant.

• Saves money on EMIs

• Reduces your overall cost of capital

• Helps your business stay profitable

5. Better Credit Support from Banks

Banks and NBFCs are required to provide loans to MSMEs under the priority sector lending norms by the RBI. If you are Udyam registered:

• Your loan is treated as a priority by the bank

• You may get higher loan limits under Mudra

• You may be offered top-up loans in the future

Being Udyam-registered helps build a long-term relationship with your bank.

6. Access to Other Government Schemes

Apart from Mudra Loans, Udyam-registered businesses are eligible for:

• PMEGP (Prime Minister’s Employment Generation Programme)

• Stand-Up India Scheme

• SIDBI financial assistance

• Credit-Linked Capital Subsidy Scheme

If your Mudra Loan application ever gets rejected, you can still explore these schemes — but Udyam registration is often a requirement.

Who Can Apply for a Mudra Loan with Udyam Registration?

Anyone running or planning to start a small business can apply for a Mudra Loan:

• Street vendors

• Retail shop owners

• Women entrepreneurs

• Small manufacturers

• Service providers (salon, repair shops, tutors, etc.)

• Artisans and craftspeople

• Self-employed individuals

Having a Udyam Certificate increases the chances of approval across all these categories.

Step-by-Step: How to Apply for Udyam Registration Online

Here’s how to get your Udyam Certificate in a few minutes:

1. Visit the Website: Go to the Udyam Registration portal.

2. Fill Out the Form: Enter your basic details in the online form.

3. Submit the Form: Review your details and submit the form.

4. Payment: Pay the required fee for the registration.

5. Receive OTP: You will receive an OTP on your phone and email to verify.

6. Enter OTP: We’ll call to confirm your OTP and any details to complete the form.

7. Get Your Certificate: Your Udyam registration certificate will be sent to your email.

Tips to Improve Your Chances of Getting a Mudra Loan

• Complete your udyam registration online before applying

• Maintain a clean banking and credit history

• Clearly explain how you’ll use the loan

• Keep your documents ready and updated

• Start with a Shishu loan, then move up to Kishor or Tarun

Note: You can also Update Udyam Certificate from our website

Conclusion

Getting a Mudra Loan can be a game-changer for small businesses — and having Udyam Registration makes the process easier, faster, and more successful.

The udyam registration online process is quick, easy, and simple. Once you get your certificate, it opens the door not only to Mudra Loans but also to many other government schemes that can help your business grow.

If you're serious about building your small business, start by getting your Udyam Certificate today — and take one step closer to securing your Mudra Loan and your future success.