About the scheme
- Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India in 2015 to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them.
- It provides loans upto Rs. 10 lakh to the non-corporate, non-farm small/micro enterprises.
- Under PMMY, all banks viz. Public Sector banks, Private Sector Banks, Regional Rural Banks (RRBs), State Co-operative Banks, Urban Co-operative Banks, Foreign Banks and NBFCs/Micro Finance Institutions (MFIs) – are required to lend to non-farm sector income generating activities below Rs.10 lakhs.
Loan offerings under PMMY
- 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/- provided with no collateral, @1% rate of interest/month repayable over a period of 5 years
- Kishor: covering loans above Rs. 50,000/- and upto Rs. 5 lakh
- Tarun: covering loans above Rs. 5 lakhs to Rs. 10 lakh
Why in the news?
- As per a survey conducted by Ministry of Labour and Employment, PMMY helped in generation of 1.12 crore net additional employment from 2015 to 2018 , Out of which Women accounted for 69 lakhs.