Why in the News?

In a significant move to support small businesses and entrepreneurs, the government has increased the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) to Rs 20 lakh. This decision aligns with the Union Budget 2024-25 and aims to further the goal of 'Funding the Unfunded.'

Key Changes:

• Tarun Plus: A new category, 'Tarun Plus,' has been introduced for loans ranging from Rs 10 lakh to ₹20 lakh.
  • Eligibility: Entrepreneurs who have successfully repaid previous loans under the 'Tarun' category are eligible for 'Tarun Plus' loans.
  • Guarantee Coverage: Loans up to Rs 20 lakh will be covered under the Credit Guarantee Fund for Micro Units (CGFMU).

About Pradhan Mantri Mudra Yojana (PMMY)

• Launched: 2015
• Aim: To provide easy, collateral-free micro-credit loans of up to ₹10 lakh to non-corporate, non-farm small businesses.
• MUDRA, a government institution, facilitates funding to financial institutions like banks, NBFCs, and MFIs.
• Loan Options under PMMY:
  • Shishu: Loans up to Rs 50,000
  • Kishor: 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 10 lakhs to Rs 20 lakhs (Now Extended).