The Pradhan Mantri Mudra Yojana (PMMY) is a government initiative in India launched to provide financial support to micro and small enterprises in the country. The scheme was launched by the Prime Minister of India, Narendra Modi, on April 8, 2015. “Mudra” stands for Micro Units Development and Refinance Agency.
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The primary objective of the Pradhan Mantri Mudra Yojana is to encourage entrepreneurship, promote self-employment, and facilitate the growth of small businesses, particularly in sectors such as manufacturing, trading, and services. The scheme focuses on providing financial assistance to non-corporate, non-farm small/micro enterprises.
Key features of the Pradhan Mantri Mudra Yojana:-
Three Categories: The scheme categorizes loans into three categories based on the stage of business development and funding needs:
- Shishu: Loans up to Rs. 50,000
- Kishor: Loans ranging from Rs. 50,001 to Rs. 5,00,000
- Tarun: Loans ranging from Rs. 5,00,001 to Rs. 10,00,000
No Collateral: Loans under the Mudra Yojana are collateral-free, making them more accessible to small entrepreneurs who may not have significant assets.
Interest Rates: The interest rates on Mudra loans may vary and are determined by the lending institutions. Interest rates are usually competitive to support the affordability of loans for small businesses.
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Financial Institutions: Mudra loans are provided by various financial institutions such as banks, non-banking financial companies (NBFCs), and microfinance institutions.
Flexible Repayment Terms: The repayment period for Mudra loans is flexible and depends on the nature of the business and the cash flow.
The Pradhan Mantri Mudra Yojana plays a crucial role in promoting financial inclusion and supporting the entrepreneurial aspirations of individuals across different sectors. As with any government scheme, it’s advisable to check the latest updates and guidelines from official sources for the most accurate and current information.
Also Read: What is PM Svanidhi Yojana loan
