Govt doubles Mudra loan limit to Rs20 lakh
27 Oct 2024
The finance ministry on Friday announced a doubling of the ceiling of Mudra loan under the Pradhan Mantri Mudra Yojana (PMMY) from the current Rs10 lakh to Rs20 lakh.
Union Budget 2024-25, presented in Parliament by the finance minister on 23 July 2024, had provided for enhancing the limit for Mudra loans to Rs20 lakh form the existing Rs10 lakh.
Mudra loans are given to those entrepreneurs who lack any means of financing investment. The enhanced loan limit will facilitate expansion of enterprises while expanding the scope of Mudra loan.
For increasing the ceiling of Mudra loan, the finance ministry has introduced a new category, called Tarun Plus, which will offer loans of Rs10 lakh to Rs20 lakh.
To be eligible for Tarun plus loan, an entrepreneur should have successfully completed repayment of a Tarun loan.
Loans under the PMMY, which aims at providing access to credit for those who have no other source of funding. These loans are categorised into Shishu (with loan limit of Rs50,000), Kishore (loans varying from Rs50,000 to Rs5 lakh), and Tarun (from Rs5 lakh to Rs20 lakh), depending on the various stages of business.
Non-corporate, non-farm enterprises, small businesses and the self-employed are eligible for financial assistance under the PMMY.
Loans are provided for small and micro-businesses in activities such as manufacturing, trading, services, and certain agriculture-linked operations.
As per the finance ministry notification, loans of up to Rs20 lakh under Tarun Plus will be provided under the Credit Guarantee Fund for Micro Units (CGFMU).
The Pradhan Mantri Mudra Yojan, launched in 2015, aims at providing affordable credit to micro and small enterprises, with the motto of "funding the unfunded."
