Pradhan Mantri MUDRA Yojana

15 Nov 2024 14:47:29 pm

Tags : Pradhan Mantri MUDRA Yojana

Topic: MSMEs

Why in the news?

The Pradhan Mantri MUDRA Yojana (PMMY), launched by the Prime Minister on April 8, 2015, has played a pivotal role in empowering non-corporate, non-farm small and micro enterprises by providing loans of up to ₹10 lakh. To strengthen support for aspiring entrepreneurs, the finance minister announced an increase in the loan limit to ₹20 lakh during the Union Budget 2024-25 on July 23, 2024. This new limit took effect on October 24, 2024.

Source: PIB

About Pradhan Mantri MUDRA Yojana:

It is a flagship initiative by the Government of India that was launched in 2015 and aimed at providing affordable credit to micro and small enterprises.
It focuses on integrating underserved enterprises into the formal financial system by offering them easy access to credit.
It is designed to \"fund the unfunded,\" enabling small borrowers to secure loans from various financial institutions including Public Sector Banks (PSBs), Regional Rural Banks (RRBs), Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFIs), and Non-Banking Financial Companies (NBFCs).
Loan amount up to ₹10 lakh was available for non-farm income-generating activities in sectors such as manufacturing, processing, trading, and services. Any Indian citizen with a viable business plan for a non-farm sector income-generating activity requiring credit below ₹10 lakh can apply for a MUDRA loan through banks, MFIs, or NBFCs.
- This amount has now been increased to rupees 20 lakhs.
Categories of Loans:
- Shishu: Loans up to ₹50,000, aimed at new and micro enterprises.
- Kishore: Loans ranging from ₹50,000 to ₹5 lakh, for businesses in the growth phase.
- Tarun: Loans from ₹5 lakh to ₹10 lakh, for businesses looking to expand further.
Subsidy: There is no direct subsidy under PMMY. However, if a loan is linked to a government scheme that provides capital subsidies, the loan can be availed under PMMY with the associated benefits.