The central government's fact-checking arm has issued a warning over a fraudulent loan approval letter falsely claiming to offer financial assistance under the Pradhan Mantri Mudra Yojana (PMMY).
According to PIB Fact Check, the document promises a loan of Rs three lakh in exchange for a payment of Rs 7,699 described as an “insurance charge refund”. It has categorically labelled the letter as fake and urged citizens not to fall for such scams.
“A loan approval letter claims to grant a loan of Rs 3,00,000 under Pradhan Mantri Mudra Yojana (PMMY) upon payment of Rs 7,699 as Insurance Charge Refund. This letter is fake,” it said in an X post.
A loan approval letter claims to grant a loan of ₹3,00,000 under Pradhan Mantri Mudra Yojana (PMMY) upon payment of ₹7,699 as Insurance Charge Refund#PIBFactCheck
— PIB Fact Check (@PIBFactCheck) March 20, 2026
❌ This letter is #Fake
✅ MUDRA is a refinancing Institution. MUDRA does not lend directly to the micro… pic.twitter.com/lk7oHGuz5d
The post said that Micro Units Development and Refinance Agency (MUDRA) does not directly lend money to individuals or micro-entrepreneurs. Instead, it operates as a refinancing institution, providing support to banks and other financial intermediaries.
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“Mudra loans under Pradhan Mantri Mudra Yojana (PMMY) can be availed from nearby branch office of a bank, RBI-registered NBFCs & MFIs, etc.,” the post concluded.
Under the PMMY scheme, loans are sanctioned through authorised channels such as bank branches, RBI-registered non-banking financial companies (NBFCs), and microfinance institutions (MFIs). Applicants are advised to approach these official entities rather than relying on unsolicited messages or letters.
Borrowers can also submit MUDRA loan applications via the Udyamimitra portal (www.udyamimitra.in).
“There are no agents or middlemen engaged by MUDRA for availing of Mudra Loans. The borrowers are advised to keep away from persons posing as Agents/ facilitators of MUDRA/PMMY,” as per the official website.
Any demand for advance payment, such as a processing fee, agreement charge or documentation cost, in order to secure a MUDRA loan should be treated as suspicious, as legitimate lenders do not follow such practices.
Another tell-tale sign of fraud is the promise of a “pre-approved” loan despite no application being submitted. In addition, individuals should be wary if the supposed lender can only be contacted through WhatsApp or a personal mobile number, with no traceable connection to a recognised bank branch.
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