Pradhan Mantri Mudra Yojana

Q Why is it in News ? 

More than 28.68 crore loans for an amount of Rs. 14.96 lakh crore have been sanctioned by banks, NBFCs and MFIs since the launch of Pradhan Mantri Mudra Yojana (PMMY).

Q What is Pradhan Mantri Mudra Yojana (PMMY)  and What are its funding provisions ?  

• It was launched by the government in 2015 for providing loans up to Rs. 10 lakh to the non-corporate, non-farm small/micro-enterprises.
  • Funding Provision:
    • MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a financial institution set up by the Government.
    • It provides funding to the non-corporate small business sector through various last-mile financial institutions like Banks, Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).
    • MUDRA does not lend directly to micro-entrepreneurs/individuals.

Q Which products are offered through PMMY ?  

• MUDRA has created three products i.e. 'Shishu', 'Kishore' and ‘Tarun’ as per the stage of growth and funding needs of the beneficiary micro unit.
  • Shishu: Covering loans up to Rs. 50,000.
  • Kishore: Covering loans above Rs. 50,000 and up to Rs. 5 lakh.
  • Tarun: Covering loans above Rs. 5 lakh and up to Rs. 10 lakh.
• Loans under this scheme are collateral-free loans.

Q What are major achievements of PMMY ?  

• Achievements:
  • Loans have been given to disadvantaged sections of society such as women entrepreneurs, SC/ST/OBC borrowers, Minority community borrowers, etc. The focus has also been on new entrepreneurs.
  • As per a survey conducted by Ministry of Labour and Employment, PMMY helped in generation of 1.12 crore net additional employment from 2015 to 2018.
    • Out of the 1.12 crore of estimated increase in employment, women accounted for 69 lakh (62%).