The Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India launched in April 2015 for facilitating funding to the non-corporate i.e. small and micro enterprises in non-farm sector. The loan is extended for a variety of purposes which provides income generation and employment creation in manufacturing, trading and service enterprises including allied agricultural activities.
Categorization of Mudra Loans
Based on amount of the loan, following are the three categories:
Shishu : Loans sanctioned under the scheme up to Rs.50,000
Kishore : Loans sanctioned under the scheme from Rs.50,001 to Rs.5,00,000
Tarun : Loans sanctioned under the scheme from Rs.5,00,001 to Rs.10,00,000
The maximum loan amount that can be availed of under PMMY is Rs.10,00,000
This categorization signifies the stage of growth / development and funding needs of the beneficiary micro unit/ entrepreneur and also provide a reference point for the next phase of graduation / growth.
Nature of credit facility
- The facility is collateral free i.e. borrowers need not provide any security or collateral for availing Mudra loan
- The loan amount can be availed of in nature of fund based facility like term loan, overdraft, cash credit or non-fund based facility like letter of credit, bank guarantee, etc.
All small and micro enterprises in non-farm sector
- Engaged in income generating activities
- Engaged in manufacturing, trading and services including allied agricultural activities
- Whose credit needs are up to Rs.10,00,000