Centre raises PM Mudra Yojana loan cap to ₹20 lakh under category 'Tarun Plus'
- In Reports
- 06:44 PM, Oct 25, 2024
- Myind Staff
On Friday, the government increased the maximum Mudra loan amount under the Pradhan Mantri Mudra Yojana (PMMY) from Rs 10 lakh to Rs 20 lakh. This new limit is part of a category called ‘Tarun Plus,’ aimed at encouraging entrepreneurship across the country.
“The increase aims to further the objective of the Mudra Scheme, which is to fund the unfunded. This enhancement is specifically beneficial to emerging entrepreneurs, facilitating their growth and expansion. The move aligns with the government’s commitment to fostering a robust entrepreneurial ecosystem,” stated the Finance Ministry in a press statement.
"The limit of Mudra loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the 'Tarun category,'" said Finance Minister Nirmala Sitharaman in her July 2024 Union Budget speech.
Prime Minister Narendra Modi launched PMMY on April 8, 2015, with the goal of providing non-corporate, non-farm small and micro-entrepreneurs with simple, collateral-free microcredit up to ₹10 lakh for income-generating ventures. Banks, non-banking financial firms, microfinance organisations, and other financial intermediaries are among the member lending institutions that offer loans. Banks offer three types of collateral-free loans under the current scheme: Tarun (up to Rs 10 lakh), Kishore (between Rs 50,000 and Rs 5 lakh), and Shishu (up to Rs 50,000).
Government data indicates that 66.8 million loans of Rs 5.4 trillion were approved under PMMY in 2023–2024. Since the scheme's launch, more than 487.8 million loans totalling Rs 29.79 trillion have been approved as of June 2024. According to a statement made by the Finance Minister in response to a question in the Lok Sabha, the non-performing assets (NPA) of public sector banks in Mudra loans have dropped to 3.4% in FY24 from a peak of 4.77 percent in 2020–2 and 4.89 percent in 2019–20.
As of March 2024, on the other hand, the gross non-performing assets (NPA) of scheduled commercial banks in the nation are 2.8%.
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