Why in news
The government has doubled the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) from ₹10 lakh to ₹20 lakh.
The increased limit specifically benefits entrepreneurs who have previously taken and successfully repaid loans under the “Tarun category.”
A new category called "Tarun Plus" has been introduced for loans between ₹10 lakh and ₹20 lakh.
This enhancement aligns with the government’s goal of fostering a robust entrepreneurial ecosystem in the country.
Loans up to ₹20 lakh will be backed by the Credit Guarantee Fund for Micro Units (CGFMU), reducing the risk for lenders.
Pradhan Mantri Mudra Yojana (PMMY)
The government launched it in 2015 for providing loans up to Rs.10 lakh to the non-corporate, non-farm small/micro-enterprises.
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, which stands for Micro Units Development & Refinance Agency Ltd., is a government's financial institution.
It does not lend directly to micro-entrepreneurs/individuals.
MUDRA initially created three products, i.e. 'Shishu', 'Kishore' and ‘Tarun’, as per the growth and funding needs of the beneficiary micro-units.
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.
Now "Tarun Plus" : for loans between ₹10 lakh and ₹20 lakh
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