Pradhan Mantri Mudra Yojana (PMMY)

Objective 

Features

• PMMY scheme aims to provide collateral free access to credit in a seamless manner to micro enterprises in the country.
• To fund the unfunded by bringing MSMEs to the formal financial system and extending affordable credit to them.
• PMMY aims to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes

• Ministry: Ministry of finance
• Launch year: 2015
• Purpose: PMMY is set up for providing MUDRA loans to the non-corporate, non-farming small & micro enterprises.
• MUDRA: Micro Units Development and Refinance Agency Ltd (MUDRA) is a refinance agency and not a direct lending institution. 
  • It provides refinance support to its intermediaries viz. Banks, Micro Finance Institutions (MFIs) and NBFCs. 

• Sectors eligible for loan:
  • manufacturing
  • trading and services sectors
  • activities allied to agriculture
• Means for availing Mudra loans: Bank, NBFC, MFIs etc or through Udyamimitra portal

• Nature of Assistance
  • Term Loan
  • Overdraft Limit
  • Working Capital
  • Composite Loan for Acquiring Capital
• No Need for Collaterals: Credit Guarantee Fund for Micro Units (CGFMU) provide guarantee coverage for these collateral free micro loans.
• Interest rate is deregulated: However, Interest Subvention of 2% on prompt repayment of Shishu loans extended under PMMY for a period of 12 months to all eligible borrowers.
  • Also, MUDRA extends a reduction of 25bps in its interest rates to MFIs / NBFCs, who are providing loans to women entrepreneurs.
• Mudra Card: It provides a facility of working capital arrangement in the form of an overdraft facility to the borrower. 
• Mudra Mitra: It is a mobile phone application. It guides a loan seeker to approach a Banker in availing MUDRA loan under PMMY.