What is PMMY (Pradhan Mantri Mudra Yojana)?
The term MUDRA stands for- “Micro Units Development and Refinance Agency Bank”. It gives loans at a very reasonable rate to non-corporate, non-farm small/micro enterprises. It was launched by Prime Minister, Narendra Modi on 8th April, 2015
- These loans are provided by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs.
- Under this scheme, a beneficiary can avail any of the three products according to his needs: ‘Shishu’ ‘Kishore’ and ‘Tarun’.
- The basic intention of establishing MUDRA is to extend the reach of financial institutions to small business entities involved in manufacturing, trading and service sectors.
- Any Indian citizen who has a prospective business plan for a non-farm sector income generating activity such as manufacturing processing, trading or service sector, whose credit demand is less than Rs. 10 Lakh, is eligible for this scheme.
- The borrower can reach any of the authorized financial institution along with the application and required documents in order to get the loan.
- The loan should be repaid in 3-5 years including a moratorium of up to 6 months depending on the activity/ income generation.
