New Delhi: The Union government has just doubled the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) from Rs 10 lakh to Rs 20 lakh, as announced in the Union Budget for 2024-25 back in July 2024. The Mudra Scheme’s came with an aim to provide financial support to previously underserved entrepreneurs.
“The move is in alignment with the government’s commitment to fostering a robust entrepreneurial ecosystem,” said the government. A new loan category, Tarun Plus, has been introduced for amounts between Rs 10 lakh and Rs 20 lakh, targeting entrepreneurs who have successfully repaid earlier Tarun category loans.
Loans up to Rs 20 lakh under PMMY will be covered by the Credit Guarantee Fund for Micro Units (CGFMU), providing a guarantee for these micro-loans.
Mudra Loan Limit Doubled: What Is The Scheme?
Pradhan Mantri MUDRA Yojana (PMMY) is a government-backed scheme that provides financial support to non-corporate, non-farm small/micro businesses in India. The scheme was Launched on April 8, 2015, by the Prime Minister Narendra Modi. Under the PMMY, loans are offered through various Member Lending Institutions (MLIs). This includes, Banks, Non-Banking Financial Companies (NBFCs), Micro-Finance Institutions (MFIs), and other financial intermediaries.
Under the Scheme, loans are offered to support income-generating activities across various sectors. These include, agriculture-allied activities, manufacturing, trading, and service sector.
Currently, Under the current scheme, banks offer collateral-free loans of up to Rs 10 lakh across three tiers:
- Shishu: Up to Rs 50,000.
- Kishore: Rs 50,001 to Rs 5 lakh.
- Tarun: Up to Rs 10 lakh.
(With Agency Inputs)
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