Pradhan Mantri Mudra Yojana (PMMY)
Launched – April 8, 2015
Objective – Empowering non-corporate, non-farm small and micro enterprises
Update – Loan Limit Raised to ₹20 Lakh from ₹10 Lakh
MUDRA, which stands for Micro Units Development & Refinance Agency Ltd, is a financial institution set up by the GoI under PMMY for development and refinancing micro unit enterprises. PMMY aims to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes.
The finance minister announced an increase in the loan limit to ₹20 lakh during the Union Budget 2024-25. This announcement also introduces a new loan category, Tarun Plus, designed specifically for those who have previously availed and successfully repaid loans under the Tarun category, allowing them to access funding between ₹10 lakh and ₹20 lakh.
Additionally, the Credit Guarantee Fund for Micro Units (CGFMU) will now provide guarantee coverage for these enhanced loans, further reinforcing the government’s commitment to nurturing a robust entrepreneurial ecosystem in India.
Need for the MUDRA Yojana
India is a young country brimming with youthful enthusiasm and aspirations. In order to provide a fertile ground for sowing the seeds of India’s development it is very important to harness this innovative zeal of young India which can provide new age solutions to existing gaps in the economic ecosystem of the country. Understanding the need to harness the latent potential of entrepreneurship in India, the Union Government launched the Pradhan Mantri MUDRA Yojana.
MUDRA Loans Categories
MUDRA loans now will be offered in four categories namely, Shishu, Kishore and Tarun and Tarun Plus –
- Shishu – Rs. 50,000/-
- Kishore – Rs. 50,000/- and up to Rs. 5 lakhs
- Tarun – Rs. 5 lakh and up to Rs. 10 lakhs
- Tarun Plus – Rs. 10 lakh and up to Rs. 20 lakhs
The Pradhan Mantri MUDRA Yojana (PMMY) has fundamentally reshaped the landscape of entrepreneurship in India, driving significant progress in financial inclusion. By providing critical funding support, the scheme has enabled countless new entrepreneurs to turn their business ideas into reality. Over the years, it has also empowered women and minority communities, creating opportunities for economic upliftment and fostering a more inclusive growth environment. As the loan limit expands to ₹20 lakh, PMMY continues to play a vital role in nurturing small businesses and fueling the nation’s journey toward a more equitable and prosperous future.
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