Subscribe for real-time financial insights on Trade Target’s WhatsApp Channels
To give further boost to Micro, Small, and Medium Enterprises or MSMEs in India, Finance Minister Nirmala Sitharaman has announced an increase in MUDRA loan limit for entrepreneurs. The limit has been raised to Rs. 20 lakh from previous Rs. 10 lakh. This increased limit is specifically for those entrepreneurs who have successfully repaid their previous loans under this category. This announcement came as part of Sitharaman’s seventh Budget presentation since she became Finance Minister in 2019.
What is Pradhan Mantri MUDRA Yojana or PMMY?
Launched on April 8, 2015, by Hon’ble Prime Minister, Pradhan Mantri MUDRA Yojana or PMMY aims to provide loans to non-corporate, non-farm small and micro enterprises. These loans known as MUDRA loans are offered by commercial banks, regional rural banks, small finance banks, microfinance institutions and non-banking financial companies.
How to Apply for MUDRA Loans?
To apply for MUDRA loan, borrowers can approach any of the listed lending institutions or apply online through the portal http://www.udyamimitra.in.
Under PMMY, MUDRA has created three loan products to cater to different stages of business growth and funding needs:
- Shishu: For start-ups and new businesses.
- Kishore: For businesses looking to expand.
- Tarun: For well-established businesses aiming for further growth.
Additional Announcements
In addition to doubling MUDRA loan limit, Sitharaman announced several measures to support MSMEs:
- New mechanism to ensure continued bank credit to MSMEs during periods of financial stress.
- Reduction of turnover threshold for mandatory onboarding on Trade Receivables Discounting System (TReDS) platform from Rs. 500 crore to Rs. 250 crore.
- Financial support for 50 multi product food irradiation units in MSME sector.
- Establishment of e-commerce export hubs in public private partnership mode to help MSMEs and traditional artisans sell their products in international markets.
These initiatives aim to strengthen MSMEs providing them with more opportunities for growth and development.
