Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme launched by the Government of India on April 8, 2015, to provide financial support to small entrepreneurs and micro-enterprises. The objective of PMMY is to encourage financial institutions to extend credit facilities to non-corporate, non-farm small/micro-enterprises, which often face challenges in accessing formal credit.
What is Pradhan Mantri Mudra Yojana

Key Components of Pradhan Mantri Mudra Yojana:

PMMY offers loans under three categories, catering to different stages of business growth and financial needs:
1. Shishu (up to ₹50,000): Loans up to ₹50,000 are provided to entrepreneurs who are in the initial stages of business development. This category aims to support small business activities, covering micro-units and startups.
2. Kishor (from ₹50,001 to ₹5,00,000): Loans ranging from ₹50,001 to ₹5,00,000 are offered to entrepreneurs who have already established their businesses but need additional funding for expansion or diversification.
3. Tarun (from ₹5,00,001 to ₹10,00,000): The Tarun category provides loans from ₹5,00,001 to ₹10,00,000 to established businesses that require substantial capital infusion for further growth and development.

Key Features and Objectives of Pradhan Mantri Mudra Yojana:

1. Financial Inclusion: PMMY aims to promote financial inclusion by extending credit facilities to small entrepreneurs, street vendors, artisans, and other micro-enterprises.
2. Micro-entrepreneurship: It encourages the growth of micro-entrepreneurship by providing funding for various business activities, including manufacturing, trading, and services.
3. No Collateral: Mudra loans are collateral-free, making them accessible to entrepreneurs who may not have significant assets to pledge as security.
4. Interest Rates: Interest rates for Mudra loans are competitive and vary across financial institutions. Borrowers are encouraged to compare rates and choose the best-suited option.
5. Job Creation: By supporting small businesses, PMMY contributes to job creation, particularly in the informal sector, thereby addressing employment challenges.
6. Empowering Women Entrepreneurs: PMMY promotes women entrepreneurship by providing financial assistance to women-owned and operated micro-enterprises.
7. Promoting Responsible Borrowing: The scheme encourages responsible borrowing and financial discipline among entrepreneurs, fostering sustainable business growth.
Pradhan Mantri Mudra Yojana has played a vital role in empowering small entrepreneurs and supporting the growth of micro-businesses in India, fostering economic development and self-employment opportunities.