New Delhi | The government has doubled the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) to Rs 20 lakh to promote entrepreneurship in the country.
This increase aspires to further the overall objective of the Mudra Scheme which is funding the unfunded, the finance ministry said in a statement on Friday.
A notification in this regard was issued on Thursday.
As announced by the Finance Minister Nirmala Sitharaman on July 23, 2024, in the Union Budget 2024-25, the limit under the Pradhan Mantri Mudra Yojana (PMMY) has been enhanced from the current Rs 10 lakh to Rs 20 lakh.
"The limit of Mudra loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the 'Tarun category', Sitharaman said while presenting the Budget in the Lok Sabha.
This enhancement is specifically beneficial to upcoming entrepreneurs facilitating their growth and expansion. The move is in alignment with the government's commitment in fostering a robust entrepreneurial ecosystem.
As per the notification issued in this regard, the new category of Tarun Plus is for loans above Rs 10 lakh and up to Rs 20 lakh and would be available to the entrepreneurs who have availed and successfully repaid previous loans under the Tarun category.
The guarantee coverage of PMMY loans up to Rs 20 lakh will be provided under the Credit Guarantee Fund for Micro Units (CGFMU).
PMMY was launched on April 8, 2015, by Prime Minister Narendra Modi to facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.
Loans under PMMY are provided by Member Lending Institutions (MLIs) banks, Non-banking Financial Companies (NBFCs), Microfinance Institutions (MFIs), and other financial intermediaries.
As per the existing scheme, banks provide collateral-free loans up to Rs 10 lakh under three categories -- Shishu (up to Rs 50,000), Kishore (between Rs 50,000 and Rs 5 lakh) and Tarun (Rs 10 lakh).