GS-3: ECONOMY
THE CONTEXT: The limit of Mudra loans under the PMMY was initially Rs. 10 lakhs. However, in the Union Budget 2024-25, the finance minister announced that the limit would be increased to Rs. 20 lakhs.
EXPLANATION:
About Pradhan Mantri Mudra Yojana (PMMY):
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- The PMMY is a Central Sector Scheme of the Government of India announced in 2015 during the Union Budget FY-2016 to extend affordable credit to micro and small enterprises (MSMEs).
- Amis:To fund the unfunded by bringing MSMEs to the formal financial system and extending affordable credit to them.
- MUDRA has created three products i.e. ‘Shishu’, ‘Kishore’ and ‘Tarun’ as per the stage of growth and funding needs of the beneficiary micro unit.
- Shishu:Covering loans up to Rs. 50,000.
- Kishore:Covering loans above Rs. 50,000 and up to Rs. 5 lakhs.
- Tarun:Covering loans above Rs. 5 lakh and up to Rs. 10 lakhs.
- Loans under this scheme are collateral-free loans.
Key Features of the scheme:
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- Loans through Member Lending Institution (MLIs): Public Sector Banks, Private Sector Bank, State operated cooperative banks, Regional Rural banks, Micro Finance Institution (MFI), Non-Banking Finance Company (NBFC), Small Finance Banks (SFBs) etc.
- MUDRA (Micro Units Development & Refinance Agency Ltd.) is responsible for refinancing MLIs.
- MUDRA does not lend directly to the micro entrepreneurs/individuals.
- Loans are provided to meet both term loan and working capital components of financing.
- Eligible borrowers: Non–Corporate Small Business Segment (NCSB) consisting of Individuals, Proprietary concern, Partnership Firm, Private Ltd. Company, Public Company and Any other legal forms.
- Credit Guarantee: To eligible micro units through Credit Guarantee Fund for Micro Units (CGFMU).
- CGFMU was established in 2015 for guaranteeing loans sanctioned under PMMY.
- Loans through Member Lending Institution (MLIs): Public Sector Banks, Private Sector Bank, State operated cooperative banks, Regional Rural banks, Micro Finance Institution (MFI), Non-Banking Finance Company (NBFC), Small Finance Banks (SFBs) etc.
Other benefits:
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- No need to pay processing charges or offer collateral, improved access to affordable credit, and flexible repayment options.
- MUDRA Card:Debit card issued against the MUDRA loan account, for working capital portion of the loan.
MUDRA 1.0 VS MUDRA 2.0
| MUDRA 1.0 | MUDRA 2.0 |
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Achievements:
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- Loans have been given to disadvantaged sections of society such as women entrepreneurs, SC/ST/OBC borrowers, Minority community borrowers, etc. The focus has also been on new entrepreneurs.
- As per a survey conducted by Ministry of Labour and Employment, PMMY helped in generation of 1.12 crore net additional employment from 2015 to 2018.
- Out of the 1.12 crore of estimated increase in employment, women accounted for 69 lakh (62%).
Source:
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