The limit of loans provided under PMMY is to be increased to INR 20 Lakh from the existing INR 10 Lakh
The limit of loans will be for entrepreneurs who had applied, availed and repaid MUDRA loans under the TARUN category to date
The TARUN category of the MUDRA loan provides loans in the range of INR 5 Lakh to INR 10 Lakh
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Finance minister (FM) Nirmala Sitharaman on July 23 (Tuesday) announced that the limit of loans provided under the Pradhan Mantri MUDRA Yojana (PMMY) will be increased to INR 20 Lakh from the existing INR 10 Lakh.
While presenting the Union Budget 2024-25, the FM said that the increase in the limit of loans will be for entrepreneurs who had applied, availed and repaid MUDRA loans under the TARUN category to date.
The TARUN category of the MUDRA loan provides loans in the range of INR 5 Lakh to INR 10 Lakh. The other two categories include Shishu loans (under INR 50,000) and Kishor loans (between INR 50,000 and INR 5 Lakh).
The PMMY scheme was launched by the government on April 8, 2015, for providing loans of up to 10 Lakh to non-corporate, non-farm small & micro enterprises. These loans are classified as MUDRA loans under PMMY.
“The enhancement of Mudra loans to INR 20 Lakh will fuel the growth of mid-level companies (INR 50 Lakh to INR 2 Cr revenue) and ensure they get enhanced opportunities,” fintech startup Fibe’s cofounder and CEO Akshay Mehrotra said.
These loans are given by commercial banks, regional rural banks, small finance banks, microfinance institutions and non banking financial corporations. Startups and entrepreneurs can avail Mudra loans by applying to banks, NBFCs or MFIs, pick the category suited for their requirement, comply with the terms and conditions and avail the financed amount.
While presenting the interim budget for 2024-25 in February, the finance minister said that the government extended 43 Cr loans amounting to INR 22.5 Lakh Cr under PMMY till February 1. Of these, nearly 70% loans were given to women entrepreneurs.
Besides the MUDRA loans push, the finance minister announced a credit guarantee scheme for the micro, small and medium enterprises (MSMEs) in the manufacturing sector in the Union Budget 2024-25. The scheme will help in facilitating term loans to MSMEs for the purchase of machinery and equipment sans collateral or third-party guarantees.
Besides, the budget also highlighted the central government’s plans to establish ecommerce export hubs in a public-private partnership (PPP) model to empower MSMEs and traditional artisans to sell their products in international markets.
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