Source: This post on Government Doubles Loan Limit Under Pradhan Mantri Mudra Yojana has been created based on the article “Govt. doubles loan limit under Mudra Yojana to ₹20 lakh” published in The Hindu on 26th October 2024.
Why in news?
The loan limit under the Pradhan Mantri Mudra Yojana (PMMY) has been raised from ₹10 lakh to ₹20 lakh. This aimed at bolstering entrepreneurship across India. This increase aligns with the Mudra Scheme’s mission of “funding the unfunded,” expanding opportunities for aspiring entrepreneurs to access capital.
Budget Announcement Details
1. Union Budget Declaration: In the Union Budget 2024-25, Finance Minister Nirmala Sitharaman announced this enhancement to support entrepreneurs who have previously availed and successfully repaid Mudra loans.
2. Eligibility for New Limit: Entrepreneurs who have already taken and repaid loans under the ‘Tarun’ category of the PMMY are eligible for the increased loan limit under a new category, termed “Tarun Plus.”
3. New Category and Benefits: A new category called ‘Tarun Plus’ has been established for loans ranging from ₹10 lakh to ₹20 lakh. This is exclusively available to entrepreneurs who have successfully repaid earlier Tarun loans.
4. Expanded Guarantee Coverage: The Credit Guarantee Fund for Micro Units (CGFMU) will extend guarantee coverage to PMMY loans up to the new limit of ₹20 lakh, further reducing the financial risk for lenders.
5. Promoting an Entrepreneurial Ecosystem: This decision is part of the government’s strategy to foster a dynamic entrepreneurial ecosystem, helping emerging businesses to expand and contribute to the economy.
Read more: Mudra Scheme: performance and significance
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