Pradhan Mantri Mudra Yojana(PMMY)

Why in news?

• The Prime Minister has said that the Mudra loan project for small and micro enterprises has created over eight crore new entrepreneurs.

About Pradhan Mantri Mudra Yojana(PMMY):

• It was launched in 2015
• It aims to provide collateral-free loans of up to Rs. 10 Lakh to small/micro enterprises.
• The loans are extended by Member Lending Institutions (MLIs) viz Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) etc.
• The loans are given for income-generating activities in manufacturing, trading and services sectors and for activities allied to agriculture.
• MUDRA loans are offered in three categories:
  • 1) Shishu: covering loans up to Rs. 50,000/
  • 2) Kishore: covering loans above Rs. 50,000/- and up to Rs. 5 lakhs
  • 3) Tarun: covering loans above Rs. 5 lakh and up to Rs. 10 lakhs.

About MUDRA Card:

• It is an innovative credit product wherein the borrower can avail of credit in a hassle-free and flexible manner. It provides a facility of working capital arrangement in the form of an overdraft facility to the borrower.
• Since a MUDRA Card is a RuPay debit card, it can be used for drawing cash from an ATM or Business Correspondent or making a purchase using a Point of Sale (POS) machine.
• Facility is also there to repay the amount, as and when, surplus cash is available, thereby reducing the interest cost.

PRACTICE QUESTION:

With reference to ‘Pradhan Mantri Mudra Yojana(PMMY)’, consider the following statements:

1. Only manufacturing units are eligible for loan under the scheme

2. Only small or micro enterprises are eligible for loan under the scheme

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer