The Pradhan Mantri Mudra Yojana continues to expand access to collateral free credit for small entrepreneurs and micro enterprises across the country, with loans of up to 20 lakh rupees now available to eligible borrowers under the scheme.
The Department of Financial Services informed that the scheme, launched on April 8, 2015, aims to provide financial support to individuals and small businesses engaged in income generating activities in the manufacturing, trading and services sectors, including activities allied to agriculture.
Under the scheme, loans are extended through Member Lending Institutions such as Scheduled Commercial Banks, Non Banking Financial Companies and Micro Finance Institutions. Individuals with a viable business plan for a small enterprise are eligible to apply for credit support under the programme.
The Mudra loan framework is structured into four categories based on the scale and stage of business.
Categories of Mudra Loans
• Shishu loans up to 50,000 rupees
• Kishor loans above 50,000 rupees and up to 5 lakh rupees
• Tarun loans above 5 lakh rupees and up to 10 lakh rupees
• Tarun Plus loans above 10 lakh rupees and up to 20 lakh rupees for entrepreneurs who have successfully repaid earlier loans under the Tarun category
The Tarun Plus category was introduced from October 24, 2024 to incentivise successful borrowers who have repaid previous Mudra loans and wish to expand their businesses.
Officials said the scheme has played a significant role in supporting small businesses, handicrafts, agriculture allied activities and traditional enterprises across the country.
The initiative has also benefited women entrepreneurs who often face difficulties in accessing formal credit due to lack of collateral or credit history. By providing collateral free loans, the scheme has enabled many women to start or expand income generating activities.
To further improve access to credit, the government has taken several steps to simplify the loan application process and ensure faster disbursal.
Digital platforms such as the Jan Samarth portal have been introduced to streamline loan applications. The portal integrates 15 credit linked schemes and allows applicants to submit loan requests either independently through a self service process or with assisted support.
The government said these initiatives are aimed at improving financial inclusion and promoting entrepreneurship by enabling easier access to institutional credit for micro and small enterprises.
The information was provided by Shobha Karandlaje, Minister of State for Micro Small and Medium Enterprises, in a written reply in the Lok Sabha on March 12.
