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Pradhan Mantri Mudra Yojana

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Bharathi Pradeep
Bharathi Pradeep
Editor at Bharathi covers topics on Competitive exams, How To guides, Current exams, Current Affairs, Study Materials, etc. Follow her on social media using the links below.

Pradhan Mantri Mudra Yojana 

The MUDRA, which stands for Micro Units Development and Refinance Agency Ltd., was founded as a public sector financial organization to enable any last-mile financier to give credit to all types of enterprises in the country.

Microfinance provides low-interest loans via this scheme. PM Mudra Loan is a flagship scheme introduced by the Indian government to provide loans of up to Rs. 10 lahks to micro and small businesses.

The Prime Minister announced the Mudra Yojana on 8th April 2015, with the goal of allowing Micro Finance Institutions (MFIs), Non-Banking Financial Institutions/Companies (NBFCs), Small Finance Banks, RBRs, Commercial Banks, Cooperative Banks, and others to provide Low Rate Loans to qualifying organizations. The main purpose of this scheme is to provide funding to small borrowers or non-corporate small business sectors.

  • The scheme, which has a corpus of Rs 20,000 crore, can grant small enterprises between Rs 50,000 and Rs 10 lakh.
  • After becoming MUDRA member-lending institutions, banks and MFIs can apply for refinancing under the MUDRA Scheme.
  • Mudra Loans are offered for non-agricultural activities up to Rs. 10 lakh, as well as agricultural activities like dairy, poultry, beekeeping, and so on.
  • A Mudra Card, which permits access to Working Capital via ATMs and Card Machines, is one of Mudra‚Äôs defining features.

Pradhan Mantri Mudra Yojana provides three types of loans:

  • Shishu: Covering loans up to Rs. 50,000.
  • Kishor: Covering loans above Rs. 50,000 to Rs. 5 lakh.
  • Tarun: Covering loans above Rs. 5 lakh to Rs.10 lakh.

PMMY Eligibilities

To benefit from the PMMY Scheme, the individual must be an Indian citizen. The loans are primarily intended for those who have a business plan in a non-farming sector with income-generating activities such as the following:

  • Manufacturing
  • Processing
  • Trade
  • Service Sector
  • or any other field with a credit requirement of less than ten lakh rupees.

To obtain MUDRA Loans under the PMMY Scheme, Indian citizens must go through an MFI, bank, or NBFC.

Some of the Major Goals of Pradhan Mantri Mudra Yojana:

Providing funding for the Unfunded: To make loans of up to ten lakh rupees to persons who have a business plan to earn revenue from a non-farm activity such as manufacturing, processing, commerce, or the service sector but lack the necessary capital.
Reducing jobless economic growth: To help generate sources of employment and raise overall GDP by giving financing to microenterprises.
Monitoring and regulating Microfinance Institutions (MFI): The network of microfinance institutions will be monitored, and new registrations will be made, with the assistance of MUDRA bank.
Integration of the Informal Economy into the Official Sector: It will assist India in expanding its tax base because income from the informal sector is not taxed.
Promoting financial Inclusion: PMMY expands on the idea of financial inclusion by aiming to give last-mile credit to micro-businesses through technology solutions.

Sectors Covered by PMMY

Sector/activity-oriented schemes would be implemented to maximize beneficiary coverage and customize products to fit the needs of certain business activities. To begin, strategies: are recommended based on the higher concentration of enterprises in various activities/sectors.

  • Land Transport Sector
  • Service Sector
  • Food Product Sector
  • Textile Sector

Activities that fall under those Sectors

  • Land Transport Sector:

Loans to help with the purchase of transportation vehicles. These vehicles could be used to convey commodities or people.

  1. Auto-rickshaws, E-rickshaws, and so on.
  2. Taxis and passenger automobiles
  3. Vehicles for transporting small things.
  4. Other three-wheeled vehicles.
  • Service Industry:

Community services, social services, and personal services are all examples of this.

  1. Salons for hair and beauty, beauty parlours, and so on.
  2. Tailor shops, boutiques, dry cleaning services, and so on.
  3. Gymnasiums, athletic training facilities, medical shops, and so on.
  4. Garages, cycling and motorcycle repair shops, and so on.
  5. Other services include photocopying businesses, delivery services, and so on.
  • Sectors Related to Food Products:

Assistance for small-scale food industries.

  1. Producing papads, pickles, jams & jellies, and other agricultural produce/preservation methods
  2. Sweet stores, quick-service restaurants, and so on.
  3. Catering services, canteens, and so on.
  4. Micro cold storage, ice-making plants, cold chain vehicles, ice cream manufacturing industries, and so on.
  5. Bakeries and the production of baked goods.
  • Textile Industry:

Providing assistance to micro textile enterprises that make garments and non-garment products.

  1. Handloom and power loom manufacturing
  2. Handwork industries such as embroidery, chikan work, dyeing and printing, knitting, and so on.
  3. Stitching for garments and non-garments that is mechanical or computerized.
  4. Production of vehicle and furniture accessories, for example.


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Bharathi Pradeep
Bharathi Pradeep
Editor at Bharathi covers topics on Competitive exams, How To guides, Current exams, Current Affairs, Study Materials, etc. Follow her on social media using the links below.

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