Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India. The scheme facilitates micro credit/Loan up to Rs. 10 lakhs to income generating micro enterprises engaged in the non farm sector in manufacturing, trading or service sectors including activities allied to agriculture such as poultry, dairy, beekeeping, etc. The Scheme provides financial assistance extended by Member Lending Institutions to the non-corporate, non-farm sector income generating activities of micro and small entities.

These micro and small entities comprise of millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others.

Pradhan Mantri Mudra Yojana: Overview

Pradhan Mantri Mudra Yojana was launched on April 8, 2015 by Prime Minister Narendra Modi. With the Pradhan Mantri Mudra Yojana, PMMY, all enterprises would be able to readily obtain bank loans of up to Rs 20 lakh.

Commercial banks, RRBs, small finance banks, cooperative banks, and MFIs offer Mudra loans. The Mudra Loan Scheme has no fixed interest rate. The primary interest rate on these loans is 12%. The loan repayment time has been extended to five years.

“Empowerment of Women through entrepreneurship, ease of living and dignity has gained momentum in last 10 years 30 crore MUDRA Yojana loans have been given to woman entrepreneurs,” said finance minister Nirmala Sitharaman in her Budget speech 2024.

Pradhan Mantri Mudra Yojana: Budget 2024 update

While presenting the Budget 2024, Finance Minister Nirmala Sitharaman on July 23, 2024, announced that the upper limit of Mudra loans will be doubled. According to the Budget 2024, the limit of Mudra loans will be increased to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.

Mudra Loan: Key Highlights

Loan Facility	Overdraft, Cash Credit and Term Loan
Interest Rates	Varies based on the bank’s policy
Loan amount	Up to Rs 20 lakh
Tenure	Varies based on the bank’s policy
Processing Fees	No processing fee for Shishu category (loans up to Rs 50,000)
Processing Fees	Depends on the bank for Tarun and Kishore category

Pradhan Mantri Mudra Yojana: What are mudra cards?

Mudra Loan refers to the loan issued under the Pradhan Mantri Mudra Yojana and Mudra cards are debit cards issued to Mudra loan holders. Their characteristics are:

You can withdraw money from ATMs with this card.
The bank makes a loan section in your name up to a certain limit. You can withdraw money with this card up to the bank’s approved limit.
This card can be used to meet the business’s working capital needs.
Currency transactions using Mudra cards are now entirely digital.
The beneficiary can use this card to withdraw money from ATMs located around the country and to make payments at Point of Sale devices.

PMMY: Mudra loan types

Shishu Loan – The bank will provide a loan of up to Rs 50,000.
Kishor Loan – The bank would provide a loan ranging from Rs 50,000 to Rs 5 lakh.
Tarun Loan – The bank would provide a loan ranging from 5 lakh to 10 lakh.

Pradhan Mantri Mudra Yojana: Eligibility

The age of the applicant must be at least 18 years old.
Person should have valid ID proof.
The groups listed below are eligible for this scheme:

Small Business
Artisans
Shopkeepers
People engaged with Agriculture
Purchase of commercial vehicles such as tempo, truck, auto etc.
Food processing sector including manufacturing, packing and distribution.
Services such as doctors, lawyers etc.
Other income generating sectors such as repair shops, beauty parlours etc.

Pradhan Mantri Mudra Yojana: Documents required

Application form for Mudra
2 passport-sized colour photos
Photo identification is required
Address verification
Proof of income
Account statement (last 6 months)
Business plan
Quotation of the business
Caste certificate
Proof of ownership of the business

Pradhan Mantri Mudra Yojana: How to Apply?

To begin, to apply under this plan, the applicant must fill out the Pradhan Mantri Mudra Yojana application form from the relevant bank.
Following that, all of the information requested in the application form, such as name, address, mobile number, Aadhar card number, and so on, must be filled out and submitted to the relevant bank.
After the bank officer has verified your application form and all of your documentation, the loan money will be deposited into your bank account within one month.

FAQs

Are MUDRA Loans Available For Purchase Of CNG Tempo/Taxi?

MUDRA loans would be available for purchase of CNG Tempo/Taxi, in case the applicant intends to use the vehicle for commercial purposes.

Is It Required To Submit Income Tax Returns For The Preceding 2 Years For Availing Loan Of Rs. 10 Lakh Under PMMY?

Generally, IT returns are not insisted for small value loans. However, the requirement of documents will be advised by the concerned lending institutions based on their internal guidelines and policies.