Pradhan Mantri Mudra Yojana (PMMY)

Current Context : Recently, Union government has increased the maximum loan limit under PMMY  from ₹10 lakh to ₹20 lakh.

1. New Loan Category – ‘Tarun Plus’: A new category, Tarun Plus, has been introduced for loans between ₹10 lakh to ₹20 lakh.
   1. Eligibility for Tarun Plus: Entrepreneurs who have previously availed and repaid a loan under the Tarun category can apply.
   2. Guarantee Coverage: Loans under Tarun Plus up to ₹20 lakh will be covered by the Credit Guarantee Fund for Micro Units (CGFMU).

2. Credit Guarantee Fund for Micro Units (CGFMU):
   1. Established in 2016under the National Credit Guarantee Trustee Company Ltd. (Government-owned).
   2. It provides a guarantee for loans issued under PMMY, covering eligible institutions and schemes.

About Pradhan Mantri Mudra Yojana (PMMY)

1. Launch : Initiated in 2015to promote micro-credit.
2. Objective : Provide collateral-free loans to individuals for non-corporate, non-farm activities like manufacturing, processing, trading, or services.
3. Implementing Agency : MUDRA (Micro Units Development & Refinance Agency Ltd.), which funds financial institutions, including banks, Non-Banking Financial Companies (NBFCs), and Microfinance Institutions (MFIs).
4. Loan Categories:
   1. Shishu: Loans up to ₹50,000.
   2. Kishor: Loans from ₹50,001 to ₹5 lakh.
   3. Tarun: Loans from ₹5 lakh to ₹10 lakh.
   4. Tarun Plus(New): Loans from ₹10 lakh to ₹20 lakh