Over 34.42 crore loan accounts amounting to Rs. 18.60 lakh crore have opened under PMMY. Check eligibility and key details

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Pradhan Mantri Mudra Yojana is a loan scheme initiated by the Government of India to offer business loans of up to Rs. 10 lakh to individuals, MSMEs and self-employed professionals.

Mudra loans under Pradhan Mantri Mudra Yojana (PMMY) can be obtained from a nearby branch of a bank, NBFC, MFI, etc. Borrowers can now apply online for MUDRA loans on the Udyamimitra portal.

PMMY was launched on April 8, 2015 to provide loans of up to Rs. 10 Lakh to non-corporate and non-agricultural small/micro enterprises.

While celebrating the 7th anniversary of the program, Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman said, “It should be noted that more than 34.42 crore loan accounts amounting to Rs. 18.60 lakh crore have been opened under the income generating business scheme.”

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Purpose of the MUDRA loan

Mudra loan is granted for various purposes resulting in income generation and job creation. Loans are granted mainly for:

* Commercial loan for vendors, traders, traders and other service industry businesses

* Working capital loan via MUDRA cards

* Equipment financing for micro-units

* Loans for transport vehicles – for commercial use only

* Loans for non-agricultural agro-industrial income-generating activities, e.g. fish farming, beekeeping, poultry farming, etc.

* Tractors, tillers and two-wheelers used for commercial purposes only.

Mudra loan categories

Shishu: covers loans up to 50,000/-

Kishor: cover for loans above 50,000/- and up to 5 lakh

Tarun: covering loans above 5 lakh and up to 10 lakh

There is a 2% interest subsidy on prompt repayment of Shishu loans issued under the PMMY for a period of 12 months to all eligible borrowers.

Eligibility for Mudra Loans

Any Indian citizen who has a business plan for non-farm income generating activity such as manufacturing, processing, trading or service sector whose credit requirement is up to 10 lakh can contact a bank, a MFI or NBFC to qualify for MUDRA loans under PMMY. The usual terms and conditions of the lending agency may need to be followed to qualify for loans under the PMMY. Loan rates are in line with the RBI directives issued in this regard from time to time.

Under the PPMY, about 68% of the total number of loans were made to women entrepreneurs. The average amount of loans is around Rs 54,000 and 86% of loans are in the “SHISHU” category.

Nearly 22% of loans were granted to new entrepreneurs. About 23% of loans were granted to SC and ST borrowers; About 28% of the loans were granted to OBC borrowers (a total of 51% of the loans were granted to SC/ST/OBC categories of borrowers). About 11% of the loans were granted to borrowers from the minority community.