Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri MUDRA Yojana (Micro Units Development and Refinance Agency) is a flagship scheme launched by the Government of India in April 2015 to promote the growth of micro-enterprises and to provide financial assistance to small business owners and entrepreneurs. The primary aim of this scheme is to facilitate the funding needs of non-corporate, non-farm small/micro enterprises in the country. (Let’s see PM Jan Dhan Yojana article)

Mudra Yojana as a Central Gov Intiative

Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched by the Government of India on April 8, 2015, to provide loans up to Rs. 10 lakhs to non-corporate, non-farm small/micro enterprises. The scheme aims to “fund the unfunded” by providing financial support to small businesses, especially those run by women and marginalized sections of society.

• Under PMMY, loans are classified into three categories – Shishu, Kishor, and Tarun – based on the stage of business and the amount of funding required. Shishu loans are for start-ups and provide a maximum of Rs. 50,000, Kishor loans are for businesses that have been running for some time and need additional funding of up to Rs. 5 lakhs, and Tarun loans are for established businesses that require funding of up to Rs. 10 lakhs.
• The scheme is implemented through various financial institutions, including nationalized banks, regional rural banks, state cooperative banks, microfinance institutions, and non-banking financial companies (NBFCs). Entrepreneurs can apply for loans under PMMY through these institutions or through the online portal of the scheme.

Feature

Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched by the Indian government to provide loans up to Rs. 10 lakh to non-corporate, non-farm small/micro enterprises. The scheme aims to support these small businesses in their early stages and help them grow and become self-sustainable. Some of the key features of PMMY are:

1. Target group: The scheme is targeted towards small businesses, such as shopkeepers, fruit/vegetable vendors, artisans, food service units, small manufacturing units, etc.
2. Loan amount: The scheme provides loans ranging from Rs. 50,000 to Rs. 10 lakh.
3. No collateral required: The loans provided under PMMY are collateral-free, meaning that borrowers do not have to provide any security or guarantor to avail the loan.
4. Interest rates: The interest rates for PMMY loans vary depending on the borrower’s credit score and the bank’s lending policies. However, the rates are usually lower than other loans provided by banks.
5. Repayment period: The repayment period for PMMY loans ranges from 3 to 5 years, depending on the loan amount and the borrower’s repayment capacity.
6. Eligibility criteria: Any individual, proprietorship firm, partnership firm, or private limited company engaged in non-farm activities can apply for a PMMY loan.
7. Application process: PMMY loans can be applied for through various banks, NBFCs, and microfinance institutions (MFIs) that are registered under the scheme.
8. Subsidies: The government provides subsidies to lending institutions for providing loans under PMMY, which helps reduce the interest rates for borrowers.

Need

Pradhan Mantri Mudra Yojana (PMMY) is a government scheme launched in 2015 aimed at providing financial assistance to small and micro enterprises. The scheme’s objective is to help these businesses access institutional credit and expand their operations.

The need for PMMY arose from the fact that small and micro enterprises, which form the backbone of the Indian economy, often face difficulties in obtaining loans from traditional banking channels due to their size and lack of collateral. This scheme provides loans up to Rs. 10 lakh to such businesses, without the requirement of any collateral or third-party guarantee.

Through PMMY, the government aims to create more job opportunities, promote entrepreneurship, and boost economic growth in the country. The scheme also aims to bring the informal sector into the formal sector by providing these businesses with institutional finance, which can help them grow and become more sustainable.

Application Procedure

Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched by the Government of India to provide financial assistance to small businesses, entrepreneurs, and individuals who are involved in non-farm income generating activities. The scheme offers loans up to Rs. 10 lakh to eligible candidates.

The application procedure for Pradhan Mantri Mudra Yojana (PMMY) is as follows:

1. Visit the official website of PMMY at https://www.mudra.org.in/
2. Download and fill the Mudra loan application form from the website.
3. Submit the filled application form along with the required documents to the nearest branch of any of the participating banks.
4. The bank will then process your application and verify the details provided.
5. Once your application is approved, the loan amount will be disbursed to your bank account.

Require Document

The required documents for PMMY loan application are:

1. Proof of identity: Aadhaar card, Voter ID card, PAN card, Passport, or any other government-issued identity proof.
2. Proof of address: Aadhaar card, Voter ID card, Passport, or any other government-issued address proof.
3. Proof of business or income: Business registration certificate, GST registration certificate, Income tax returns, or any other relevant documents.
4. Passport size photographs.

It is important to note that the loan amount and interest rate will depend on the bank’s discretion and the applicant’s credit score. Additionally, the applicant must fulfill the eligibility criteria set by the government and the participating banks to avail the loan under PMMY.

Conclusion

Overall, PMMY provides a boost to the small business sector in India by providing easy access to finance and promoting entrepreneurship. The Pradhan Mantri MUDRA Yojana has played a crucial role in supporting small businesses, startups, and entrepreneurs, particularly in rural and semi-urban areas, by providing them with the necessary financial resources to grow and thrive. It aligns with the government’s vision of promoting self-employment and fostering economic development at the grassroots level.