New Delhi: Bringing cheers to the micro-entrepreneurs ahead of Diwali in the country, the Union Finance Ministry on Friday increased the loan limit under Pradhan Mantri Mudra Yojana (PMMY) from Rs 10 lakh to Rs 20 lakh.
Earlier, Finance Minister Nirmala Sitharaman had proposed about the enhancement of the loan limit under the scheme — which facilitate easy collateral-free microcredit to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities—in the Union Budget 2024.
The Department of Financial Services (DFS) of the Finance Ministry has also come up with a new ‘Tarun Plus’ category under the scheme to promote entrepreneurship.
The new category of Tarun Plus is for Loans above Rs 10 lakh and up to Rs 20 lakh. It will be available to the entrepreneurs, who have availed and successfully repaid previous loans under the Tarun category.
The guarantee coverage of PMMY loans upto Rs 20 lakh will be provided under the Credit Guarantee Fund for Micro Units (CGFMU), a statement from the ministry read.
What is MUDRA?
MUDRA is the acronym for Micro Units Development & Refinance Agency Ltd. It is a financial institution established by the Government of India to finance micro-enterprises. Under this scheme, loans are provided to non-corporate small businesses through a network of Last-Mile Financial Institutions such as banks, non-banking financial companies (NBFCs), and microfinance institutions (MFIs).
What are the categories under MUDRA?
MUDRA has various products or schemes. These schemes have been categorized as ‘Shishu’, ‘Kishor’, ‘Tarun’, and now ‘Tarun Plus.’ While ‘Shishu’ covers loans up to 50,000, ‘Kishor’ covers loans above 50,000 and up to 5 lakh. ‘Tarun’ category is for loans above 5 lakh and up to 10 lakh