Pradhan Mantri Mudra Yojana (PMMY)

Prelims: Current events of national and international importance | Government Policies

Why in News?

Recently, Prime Minister highlighted how PM Mudra Yojana has empowered millions of small entrepreneurs on its 11^th anniversary.

MUDRA – Micro Units Development and Refinance Agency Ltd. (MUDRA), a Non-Banking Financial Company (NBFC).
It targets young educated or skilled workers and entrepreneurs including women entrepreneurs.
It also acts as a regulator for Micro-Finance Institutions (MFIs).
Aim – To provide credit of up to Rs 10 lakh to small entrepreneurs.
Launched on – April 2015
Nodal Ministry – Ministry of Finance
Implemented by – Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, MFIs, NBFCs.
Objective – Provide collateral-free institutional credit up to Rs.10 lakh to small businesses, reducing their reliance on high-interest informal moneylenders.
Eligibility – Individuals, Proprietary concern, Partnership Firm, Private Ltd. Company, Public Company, or Any other legal forms.
Product Categories –
Loans are classified based on growth stage of the enterprise –

Shishu	Loans up to Rs.50,000.
Kishore	Loans above Rs.50,000 and up to Rs.5 lakh.
Tarun	Loans above Rs.5 lakh and up to Rs.10 lakh.
Tarun Plus	Loans above Rs.10 lakh and up to Rs.20 lakh.

Key Features
Collateral-free loans, covered under Credit Guarantee Fund for Micro Units (CGFMU), managed by the National Credit Guarantee Trustee Company (NCGTC).
MUDRA Card – Debit card issued against Mudra loan account for working capital, enabling digital transactions and credit history creation.
Micro Credit Scheme – Loans up to Rs.1 lakh through MFIs for micro‑enterprise activities.
Coverage –

Business loans	Vendors, traders, shopkeepers, service enterprises
Transport vehicles	Autos, taxis, e‑rickshaws, tractors (commercial use).
Community services	Salons, tailoring, repair shops, medicine shops.
Food sector	Papad, pickle, bakery, catering, cold storage.
Textiles	Handloom, embroidery, dyeing, apparel design.
Equipment finance	Machinery/equipment for micro units.
Agri‑allied activities	Poultry, dairy, bee‑keeping, pisciculture, agro‑processing.

Synergies –
Make in India, start‑up India, stand‑up India – promoting enterprise creation.
National Rural Livelihoods Mission (NRLM) & – National Urban Livelihoods Mission (NULM) – supporting rural and urban livelihoods.
National Skill Development Corporation (NSDC) – skill development for entrepreneurs.

References