About the scheme
- Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them.
- Launched in 2015 to promote entrepreneurship, PMMY provides loans upto Rs. 10 lakh to the non-corporate, non-farm small/micro enterprises.
- Under PMMY collateral free loans of upto Rs. 10 Lakh are extended by Member Lending Institutions (MLIs) viz Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) etc.
- The loans are given for income generating activities in manufacturing, trading and services sectors and for activities allied to agriculture.
- Mudra loans are offered in three categories namely, ‘Shishu’, ‘Kishore’ and ‘Tarun’ which signifies the stage of growth or development and funding needs of the borrowers:-
- Shishu : covering loans upto Rs. 50,000/-
- Kishore : covering loans above Rs. 50,000/- and upto Rs. 5 lakh
- Tarun : covering loans above Rs. 5 lakh and upto Rs. 10 lakh.
- With an objective to promote entrepreneurship among the new generation aspiring youth, it is ensured that more focus is given to Shishu Category loans and then Kishore and Tarun categories.
Why in News?
- Pradhan Mantri Mudra Yojana has completed 8 years of its existence. During these eight years, loans worth Rs 24 lakh crore have been provided to more than 40 crore beneficiaries.
- In the last 8 years, this scheme has proved to be a boon for small entrepreneurs. Especially women have got a lot of benefits from this scheme. This is evident from the fact that 68% of accounts under the scheme belong to women entrepreneurs, while 51% belong to entrepreneurs from SC/ST and OBC categories.