PM Mudra Yojana: To further assist emerging entrepreneurs, the Indian government has increased the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) from Rs 10 lakh to Rs 20 lakh. A notification regarding this change was issued on Thursday, aiming to advance the program's mission of "funding the unfunded" and to provide enhanced financial support to small businesses across the nation.
This decision, announced by Finance Minister Nirmala Sitharaman during the Union Budget for 2024-25 on July 23, 2024, reflects the government's continuous efforts to improve credit access for micro and small enterprises. On Friday, the Finance Ministry highlighted that this initiative is intended to promote an entrepreneurial culture and encourage job creation, particularly in rural and underserved areas.
Sitharaman stated in the Lok Sabha while presenting the Budget, "The limit for Mudra loans will be increased to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have successfully repaid previous loans under the 'Tarun category.'" This enhancement is expected to significantly benefit emerging entrepreneurs by facilitating their growth and expansion, aligning with the government's commitment to building a strong entrepreneurial ecosystem.
Eligibility: According to the notification, the new 'Tarun Plus' category is designated for loans exceeding Rs 10 lakh and up to Rs 20 lakh, available to entrepreneurs who have successfully repaid previous loans under the Tarun category. PMMY loans up to Rs 20 lakh will have guarantee coverage under the Credit Guarantee Fund for Micro Units (CGFMU).
About Pradhan Mantri Mudra Yojana: Launched on April 8, 2015, by Prime Minister Narendra Modi, the Pradhan Mantri Mudra Yojana aims to facilitate easy, collateral-free micro-credit of up to Rs 10 lakh for non-corporate, non-farm small and micro-entrepreneurs engaged in income-generating activities. Loans under PMMY are disbursed by Member Lending Institutions (MLIs), including banks, Non-banking Financial Companies (NBFCs), Microfinance Institutions (MFIs), and other financial intermediaries. Under the existing scheme, banks offer collateral-free loans up to Rs 10 lakh categorized into three groups: Shishu (up to Rs 50,000), Kishore (from Rs 50,000 to Rs 5 lakh), and Tarun (up to Rs 10 lakh).
