The finance ministry announced that the government has raised the loan ceiling under the Pradhan Mantri Mudra Yojana (PMMY) to US$ 23,789 (Rs. 20 lakh) to stimulate entrepreneurship in India. Initially outlined by Union Minister of Finance Ms. Nirmala Sitharaman during the Union Budget 2024-25 on July 23, 2024, the initiative aims to fulfil the scheme’s goal of “funding the unfunded.” Under this expansion, entrepreneurs who have previously availed and successfully repaid loans under the ‘Tarun category’ can now access enhanced loan support up to US$ 23,789 (Rs. 20 lakh) under a new ‘Tarun Plus category, which covers amounts above US$ 11,894 (Rs. 10 lakh).
To support these larger loans, the Credit Guarantee Fund for Micro Units (CGFMU) will provide coverage of PMMY loans up to US$ 23,789 (Rs. 20 lakh). PMMY, launched on April 8, 2015, by Prime Minister Mr. Narendra Modi, enables collateral-free microcredit to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities. Currently, PMMY loans are classified into three categories: Shishu up to US$ 594.50 (Rs. 50,000), Kishore from US$ 594.50 to US$ 5,945 (Rs. 50,000 to Rs. 5 lakh), and Tarun up to US$ 11,894.84 (Rs. 10 lakh). With this new provision, aspiring entrepreneurs under the Tarun Plus category can receive additional financial support, encouraging growth and development within India’s entrepreneurial ecosystem.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
