Govt. doubles loan limit under Mudra Yojana to ₹20 lakh
- October 26, 2024
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Govt. doubles loan limit under Mudra Yojana to ₹20 lakh
Sub : Schemes
Sec: Eco
Context:
- The government has doubled the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) from ₹10 lakh to ₹20 lakh.
- This initiative is part of the government’s broader strategy to foster a robust entrepreneurial ecosystem, facilitating growth and expansion for emerging entrepreneurs.
New Tarun Plus Category:
- A new category called Tarun Plus has been introduced for loans above ₹10 lakh and up to ₹20 lakhs.
- The enhanced loan limit is specifically available to entrepreneurs who have successfully availed and repaid loans under the Tarun category, which allows loans up to ₹10 lakh.
Pradhan Mantri Mudra Yojana (PMMY):
- The Pradhan Mantri MUDRA Yojana (PMMY) was launched in 2015, with the aim to facilitate easy collateral-free micro credit of up to ₹10 lakh to non-corporate, non-farm small and micro entrepreneurs for income generating activities.
- It aims to promote entrepreneurship by funding the unfunded.
Key Features:
- Loan Categories:
- Shishu: Loans up to ₹50,000
- Kishore: Loans above ₹50,000 and up to ₹5 lakh
- Tarun: Loans above ₹5 lakh and up to ₹10 lakh
- Loan Limit Enhancement: As of the 2024-25 budget, the loan limit for the Tarun category has been increased to ₹20 lakh for entrepreneurs who have successfully repaid previous loans.
- Eligibility: Micro and small enterprises, individuals, and self-help groups (SHGs) engaged in non-farm activities.
Implementation:
- The loans under PMMY are provided by Member Lending Institutions (MLIs),e., Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.
Credit Guarantee Coverage
- Loans granted under the PMMY for amounts up to ₹20 lakh will have guarantee coverage provided under the Credit Guarantee Fund for Micro Units (CGFMU).
- This coverage aims to reduce the risk for lenders and encourage them to support aspiring entrepreneurs.