Pradhan Mantri Mudra Yojana (PMMY)

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The Pradhan Mantri Mudra Yojana or PMMY is a flagship scheme of the Government of India to extend affordable credit to micro and small enterprises.Mudra schemes are designed to bring enterprises into the formal financial system, or to “fund the unfunded”. Loans under PM mudra loan scheme are available to non-farm micro or small enterprises engaged in income generation through manufacturing, trading and services.

Mudra Loan : Features

There are three types of Mudra loans depending on the loan amount:

  • Shishu: Loans sanctioned under the PMMY scheme up to Rs. 50,000
  • Kishore: Loans sanctioned under the PMMY scheme from Rs. 50,001 up to Rs.5 Lakhs
  • Tarun: Loans sanctioned under the PMMY scheme Rs. 5,00,001 up to Rs. 10 Lakhs

While there is no minimum loan amount under the Mudra loan scheme, the maximum loan amount that can be taken under the PMMY is Rs. 10 Lakhs. Borrowers don’t need to pay processing charges or offer collateral if they avail a Mudra loan.

As per the PMMY scheme, the Mudra loan can not only be offered to enterprises in the non-farm sector but also can include those engaged in allied agricultural activities, such as horticulture and fisheries. The interest rate on Mudra loans is determined by the marginal cost of lending rate or MCLR, which is calculated according to the RBI guidelines.

Mudra Loan : Eligibility

  • All non-farm enterprises
  • Under micro enterprises and small enterprises segment
  • Engaged in income generating activities
  • Engaged in manufacturing, trading and services
  • Whose credit needs are up to Rs. 10 lakhs
  • Now allied agriculture activities have also been included under PMMY scheme w.e.f. 01/04/2016.

Repayment Period

  • Term / Demand – Maximum up to 84 months with suitable moratorium subject to annual review.
  • Working Capital – For 12 months subject to annual review.