PM Mudra Yojana
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".
- 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.
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).
- 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.
- 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.
- 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.
