Rs 7 lakh PM Mudra loan for a small fee? Govt flags new online scam
MUDRA operates solely as a refinancing body and never solicits direct payments from individual borrowers.
 "Rs 7 lakh PM Mudra loan for a small fee? Govt flags new online scam")
Social media posts saying people will get a Rs 7 lakh loan under the Pradhan Mantri Mudra Yojana (PMMY) after paying a small “agreement charge” are fake, the government has warned.
The Fact Check unit of the Press Information Bureau (PIB) said “approval letters” circulating online are part of a scam designed to extract money from people
A letter claiming a loan grant of Rs 7 lakh under the scheme after paying Rs 860 as agreement charges is “fake”, said the unit.
How the scam works
Fraudsters typically send messages or letters claiming that a Mudra loan has already been approved. Victims are then asked to pay a small fee, often described as processing, agreement or documentation charges to release the loan amount.
PIB Fact Check unit cautioned that such claims are misleading because MUDRA does not lend directly to individuals or micro-entrepreneurs. Instead, it works as a refinancing agency that supports banks and other financial institutions.
This means any message asking individuals to pay money directly to receive a Mudra loan should be treated with suspicion.
What MUDRA actually does
According to the information on its official website, MUDRA, or Micro Units Development and Refinance Agency Ltd, is a government-backed financial institution created to support small businesses in the non-corporate sector.
Its role is to refinance lenders such as:
- Banks
- Non-banking financial companies
- Microfinance institutions
- Regional rural banks
- Small finance banks and similar intermediaries
These institutions then provide loans to eligible micro and small enterprises engaged in manufacturing, trading, services and allied activities.
In other words, borrowers apply for Mudra loans through authorised lenders, not directly from MUDRA.
Types of Mudra loans
Under the PM Mudra Yojana, loans are offered in four categories depending on the stage of the business:
Shishu: Loans up to Rs 50,000
Kishor: Loans above Rs 50,000 and up to Rs 5 lakh
Tarun: Loans above Rs 5 lakh and up to Rs 10 lakh
Tarun Plus: Loans above Rs 10 lakh and up to Rs 20 lakh for borrowers who have successfully repaid earlier Mudra loans
The loans are meant for non-farm income-generating activities, including small manufacturing units, traders, service businesses and self-employed entrepreneurs.
How to stay safe
Financial scams often use government schemes to gain credibility. Experts say borrowers should keep a few basic checks in mind:
Mudra loans are applied for through banks or registered lenders, not via random messages or agents.
Upfront payments demanded through unofficial channels are a common sign of fraud.
Always verify information through official government or bank websites.
The PIB urged citizens to remain cautious and verify any suspicious claim about government schemes before making payments or sharing personal details.