Pradhan Mantri Mudra Yojana (PMMY)

Loan limit under Pradhan Mantri Mudra Yojana (PMMY) increased to Rs.20 lakh from the current Rs.10 lakh.

• It is in sync with the announcement made by the Finance Minister in the Union Budget 2024-25.
• This increase aspires to further the overall objective of the Mudra Scheme which is Funding the Unfunded. 
• This enhancement is specifically beneficial to upcoming entrepreneurs facilitating their growth and expansion. 
• The move is in alignment with the Government’s commitment in fostering a robust entrepreneurial ecosystem.        

Recent Modification

• The new category of Tarun Plus is  for Loans above Rs. 10 lakh and upto Rs. 20 lakh  has been created.
• Eligibility: The facility would be available to the entrepreneurs who  have availed and successfully repaid previous loans under the Tarun category. 
• Guarantee: The guarantee coverage of PMMY loans upto Rs. 20 lakh will be provided under the Credit Guarantee Fund for Micro Units (CGFMU).

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About Pradhan Mantri Mudra Yojana (PMMY)

• PM Mudra scheme was launched on April 8, 2015 for providing collateral-free loans up to 10 lakh 
• These loans are classified as MUDRA loans under PMMY. 
• Objective: To provide loans up to 10 lakh to non-corporate, non-farm small and micro enterprises through Banks, Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs).
• Nodal Ministry: Ministry of Finance. 
• MUDRA, stands for Micro Units Development & Refinance Agency Ltd., is a financial institution set up by the Centre.
• MUDRA was initially formed as a wholly owned subsidiary of the Small Industries Development Bank of India (SIDBI) with 100% capital being contributed by it. 
• MUDRA does not lend directly to micro-entrepreneurs/individuals.
• Various types of loan options available:
  • Shishu: Covers loans upto 50,000.
  • Kishor: Covers loans above 50,000 and upto 5 lakh.
  • Tarun: Covers loans above 5 lakh and upto 10 lakh.