Why in News?
Pradhan Mantri Mudra Yojana (PMMY) has officially completed 11 successful years of operation on April 8, 2026.
Key Points
- Launched by the Government of India on April 8, 2015, to provides collateral-free loans up to ₹20 lakh to non-corporate, non-farm small and micro enterprises.
- Massive Milestone: Since its inception, the scheme has sanctioned over 57.79 crore loans.
- Economic Impact: A total of more than ₹40.07 lakh crore has been disbursed to small entrepreneurs across the country.
- Loan Limit Hike: The news highlights the recent implementation of the Tarun Plus category, which increased the loan limit from ₹10 lakh to ₹20 lakh for eligible borrowers.
- Financial Inclusion: Latest data shows that 67% of beneficiaries are women and roughly 50% belong to SC/ST/OBC categories, reinforcing the theme of "inclusive growth".
Purpose & Objective
- Funding the Unfunded: To provide formal financial support to small business owners who previously lacked access to bank credit.
- Employment Generation: To encourage self-employment and micro-enterprise growth in manufacturing, trading, and service sectors.
- Collateral-Free: One of the biggest highlights is that borrowers do not need to provide any security or collateral for these loans.
Loan Categories (The 4 Stages)
The scheme is divided based on the growth stage of the business:
- Shishu: Loans up to ₹50,000 (For startups/small vendors).
- Kishore: Loans from ₹50,001 to ₹5 lakh (For existing businesses needing capital).
- Tarun: Loans from ₹5 lakh to ₹10 lakh (For established units looking to expand).
- Tarun Plus: Loans from ₹10 lakh to ₹20 lakh (For those who have successfully repaid previous Tarun loans).
Eligibility
- Who can apply? Indian citizens including individuals, sole proprietorships, partnership firms, and small private/public companies.
- Sectors: Non-farm income-generating activities in manufacturing, trading, services, and agriculture-allied activities (like dairy, poultry, and beekeeping).
- Age: Generally between 18 to 65 years.
How to Apply?
- Lending Institutions: Loans are available through Public/Private Sector Banks, Regional Rural Banks (RRBs), Small Finance Banks, NBFCs, and Micro Finance Institutions (MFIs).
- Online Application: Borrowers can apply directly through the Udyamimitra Portal or the websites of various Member Lending Institutions.
- Mudra Card: A RuPay debit card is provided for the working capital portion, allowing flexible cash withdrawals and payments.
Performance Metrics
- Average Ticket Size: Has nearly tripled over the decade, reaching approximately ₹1.25 lakh in FY26.
- Low NPAs: Despite being unsecured, the default rate (NPAs) remains relatively low at around 3.5%.
- Top States: Tamil Nadu, Uttar Pradesh, and Karnataka lead in terms of total loan disbursal.
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