How to apply for an MSME loan (MUDRA, CGTMSE, PSL) — 2026 guide

Indian banks must lend 7.5% of their loan book to micro and small enterprises (RBI's priority sector mandate). They are actively looking for borrowers. Here is how to position your business to actually get the loan.

Step 1: Choose the right scheme

MUDRA: up to ₹20 lakh for micro businesses. Shishu (₹50K), Kishor (₹50K-₹5L), Tarun (₹5L-₹10L), Tarun Plus (₹10L-₹20L). CGTMSE: up to ₹5 cr collateral-free, government guarantee. Priority Sector Lending: regular bank loans, usually working capital.

Step 2: Build your documentation

Udyam Registration certificate. GST returns last 12 months. Bank statements last 12 months. ITR last 2 years. Audited financials last 2 years (if applicable). Business plan with 3-year projections. KYC documents.

Step 3: Pre-check your CIBIL score

CIBIL business score below 650 → unlikely to get the loan. Below 700 → expect higher interest. Above 750 → best terms. Get the report 30 days before applying, fix disputes.

Step 4: Apply on Jan Samarth or PSB Loans in 59 Minutes

jansamarth.in (unified portal for 13 schemes) or psbloansin59minutes.com. Both pre-approve based on GST, ITR and bank data. In-principle approval in 59 minutes; disbursement 7-15 days after document verification.

Step 5: Also approach your existing bank

Your relationship banker has visibility on your account that no portal does. Walk in with the documents above. Banks are incentivised to lend under PSL — they will compete for your business.

Step 6: Compare offers

Don't accept the first offer. MUDRA interest ranges 7.5-12% depending on bank and risk. CGTMSE is slightly higher because of the guarantee fee. PSL loans can be 8-10% with collateral.

Frequently asked questions