What is Pradhan Mantri Mudra Yojana (PMMY)?

Pradhan Mantri Mudra Yojana

About Pradhan Mantri Mudra Yojana

What is Pradhan Mantri Mudra Yojana (PMMY)?

Launched in 2015 by Prime Minister Narendra Modi, the Pradhan Mantri Mudra Yojana (PMMY) aims to enable Micro Finance Institutions (MFIs), Non-Banking financial institutions/Companies (NBFCs), Small Finance Banks, RBRs, Commercial Banks and Cooperative Banks to provide small loans to non-corporate non-farm micro/small enterprises and individuals engaged income-generating businesses.

What is Mudra loan

The Micro Units Development & Refinance Agency Limited (MUDRA), a wholly owned subsidiary of Small Industries Development Bank of India (SIDBI), has been vital in facilitating the implementation of the Mudra scheme by helping with refinance, extending credit guarantee support and monitoring the progress of the scheme through a dedicated web portal.
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Mudra Yojana under PMMY also encourages women entrepreneurship. To empower women in taking up business initiatives the government has asked various financial institutions, including MFIs to consider extending facilities, such as reducing interest rates on their loan for women borrowers.


Types of schemes

PMMY is an initiative by the Government of India to offer loans under 3 loan schemes named as Shishu, Kishor, and Tarun. Under the Shishu scheme - loans up to Rs 50,000 are offered to start-ups and first-time entrepreneurs. In Kishor category, loans up to Rs 500,000 are disbursed for entrepreneurs with existing businesses and loans up to Rs 10 lakh are disbursed under the Tarun scheme.
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In the first year of its implementation, PMMY has been able to provide financial assistance to nearly 35 million micro entrepreneurs with a loan amount of Rs 1.32 trillion, thereby, surpassing the target of Rs 1.22 crore.
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In 2019-2020, over 62 million businesses benefited with loan amount of over Rs 3.2 trillion.


Features of Mudra loan

1. Businesses don't need to offer collateral to avail the loan.
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2. Entrepreneurs should be 18 or above and below the age of 65 to avail the loan.
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3. There is no minimum loan amount limit in this scheme, however, an entrepreneur can only avail up to Rs 10 lakh.
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4. The loan amount has to be repaid within 5 years.
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5. All Mudra loans can be availed through Mudra cards and online as well via the Mudra app 'Mudra Mitra'


How to apply for Mudra scheme

Under Pradhan Mantri MUDRA Yojana (PMMY), borrowers can go to any branch of any of the following financial institutions in their region - PSU banks, Regional Rural Banks (RRBs) and cooperative banks, private sector banks, foreign banks, micro finance institutions (MFIs) and Non-Banking Finance Companies (NBFCs). The borrower can avail loans according to the business need which shall be approved as per the eligibility of the lending institution.
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To avail the loan, the borrower must have a non-farming business plan with background in the manufacturing, processing, trade, textile, services sector and others.

Latest Updates on Pradhan Mantri Mudra Yojana

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