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Pradhan Mantri Mudra Yojana (PMMY) | How to Apply – Check Here

In Pradhan Mantri Mudra Yojana(PMMY), Mudra stands for Micro Units Development & Refinance Agency Ltd. is a financial institution established in April 2015 launched by the Honorable Prime Minister while presenting the Union Budget for Financial Year 2016.

Mudra aims to provide financial support to the micro enterprise sector like Public Sector Banks, Private Sector Banks, Regional Rural Banks, State Cooperative Banks, Urban Cooperative Banks, and Foreign Banks or Non Banking Financial Company (NBFC) / Micro Finance Institutions (MFIs). Along with Mudra, PMMY was also launched.

The Mission of Mudra scheme is

to create an inclusive, sustainable and value based entrepreneurial culture, in collaboration with or partner institutions in achieving economic success and financial security


Key Features of Pradhan Mantri Mudra Yojana (PMMY)

Micro Credit Scheme

Under this scheme, financial support is provided to the Micro Financial Institutions (MFIs), so that they can extend their lending to individuals or a group or anyone willing to run their enterprise.

Mahila Uddyami Scheme

This scheme is designed especially for the women, group of women, Joint Liability Groups and Self Help Groups of Women who are willing to set up micro enterprises (small scale business). Special interest concessions are also offered in this scheme.

Refinance Scheme for Banks

Mudra loans refinance (provide new loans at a lower rate of interest) up to Rs 10 Lakhs to banks to extend to the borrowers but the only condition under this scheme is that banks can extend these loans only to those who are engaged in  micro or small enterprises of manufacturing and service sector.

Mudra Card

Mudra Card is a unique product which makes credit easily accessible while providing flexibility to the card owner. Mudra Card can also be used as a credit card for the overdraft limit and it can also be used as a debit card with the facility of ATM withdrawals.

Mudra card
Mudra card

Credit Guarantee Fund

In Credit Guarantee Fund, it would provide more than 1, 00,000 Crores to the finance institutions in order to reduce the credit risk.

Equipment Finance Scheme

This scheme encourages people to expand on technological front and to speed up the production of products and services.

Credit to Micro Enterprises

This scheme is striving to meet the requirements of land transport, food production, textile production and community services to maximize both the number of benefits and number of beneficiaries from the scheme.

Benefits of Pradhan Mantri Mudra Yojana (PMMY)

  • Under this yojana, all the unfunded individuals or small enterprises gets financial support.
  • This scheme also wraps the remote areas into systematic banking. And people in need can avail loans in nominal interest rates.
  • Small enterprises can get maximum benefit as it offers a credit agent scheme for a good start. Also, the scheme offers maximum benefits at minimum risk for all micro businesses.
  • Mudra Yojana provides credit guarantee i.e. in case the borrower goes into debts the government bears the loan’s responsibility.

Loans under PMMY

Under PMMY Scheme, everyone from non – farm income generating sector could seek loans up to Rs. 10 Lakhs.

The main purpose behind Mudra Loan Scheme is to engage unbanked business people and own account enterprises into the formal banking system. These Non – Corporate Small Business Sector or NCSBS are street vendors, repair shop owners, small scale industry men, and artisans.

Loan Amount and Interest Rates Offered Under Mudra Scheme

  Shishu Loan Kishore Loan Tarun Loan
Loans up to Rs- 50,000  Between  Rs 50,001- Rs 5 lakhs  more than 5 lakhs and up to Rs 10 lakhs
Interest Rates 10% to 12% 14% to 17% 16%

One essential part of Mudra Loan is that it offers loan through Mudra Card (Rupay Card: India’s own domestic card). And the card will be provided by the bank that sanctioned the loan.

Anyone or any private limited companies, public sector companies, proprietary firms can avail the Mudra Loan. The only condition is that the individual or enterprise should not be a defaulter of on any loan repayment.

Mudra Bank offers loan with nominal interest rates that too vary from bank to bank. All the loans offered by Mudra Bank are strictly monitored by Mudra Limited. The maximum tenure period of the loan is 36 months and needs to be repaid within the tenure period.

Documents Required for Applying for PMMY

  • Proof of Identity – Self attested copy of Voter’s ID Card / Driving Licence / PAN Card / Aadhaar Card / Passport / Photo Ids issued by Govt. authority etc.
  • Proof of Residence – Recent telephone bill / electricity bill / property tax receipt (not older than 2 months) / Voter’s ID Card / Aadhaar Card / Passport of Individual / Proprietor / Partners Bank passbook or latest account statement duly attested by Bank Officials / Domicile Certificate / Certificate issued by Govt. Authority / Local Panchayat / Municipality etc.
  • Applicant’s recent Photograph (2 copies) not older than 6 months.
  • Quotation of Machinery / other items to be purchased.
  • Name of Supplier / details of machinery / price of machinery and / or items to be purchased.
  • Proof of Identity / Address of the Business Enterprise – Copies of relevant Licences / Registration Certificates / Other Documents pertaining to the ownership, identity of address of business unit, if any
  • Proof of category like SC / ST / OBC / Minority etc

For all PMMY loans, the following are to be noted.

  • No processing fee
  • No collateral
  • Repayment period of loan is extended up to 5 years
  • Applicant should not be defaulter of any Bank / Financial Institution

Bank’s Performance under the (PMMY) in 2015-16

Name of the Bank No. of Accounts Amount disbursed (In Crores)
State Bank of India and Associates 1,300,589 Rs.16,999.82
ICICI Bank 150,876 Rs.3,921.51
Bank of Baroda 224,367 Rs.1,772.91
Punjab National Bank 596,839 Rs.3,593.42
HDFC Bank 1,251,106 Rs.5,356.89
Canara Bank 790,354 Rs.7,506.64
Axis Bank 460,917 Rs.2,229.17
UCO Bank 562,668 Rs.2,199.4
Bank of India 376,486 Rs.2,752.28
Union Bank of India 204,729 Rs.1,841.06



What kind of borrowers is eligible for assistance from MUDRA?

Non–Corporate Small Business Segment (NCSB) comprising of millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.

Are Regional Rural Banks (RRBs) eligible for assistance from MUDRA?

Yes, MUDRA will be extending refinance support to RRBs for enhancing their liquidity.

What are the Scope of PMMY and various types of loan available and which are the agencies that will provide loan?
Pradhan Mantri Mudra Yojana (PMMY) loans will be extended by all Public Sector Banks such as PSU banks, Regional Rural Banks (RRBs), Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions and Non Banking Finance Companies. All loans sanctioned on or after April 08, 2015 up to a loan size of 10 lakh for non farm income generating activities will be branded as PMMY loans.
Who will monitor the implementation of PMMY?
Monitoring of PMMY progress at the State level will be done through SLBC forum and at National level by MUDRA/Department of Financial Services, Government of India. For this purpose, MUDRA has developed a portal, wherein the banks and other lending institutions directly feed their achievement details which are consolidated by the system and reports are generated for review.
Is there any subsidy under PMMY? If so, details thereof?
There is no subsidy for the loan given under PMMY. However, if the loan proposal is linked to some Government scheme, wherein the Govt. if providing capital subsidy, it will be eligible under PMMY also.
Can u elaborate on the details of security to be deposited for MUDRA loans?
As per the recommendations of the Working Group constituted by RBI for reviewing the Credit Guarantee Schemes for Micro Small Enterprises and accepted by RBI, Banks have been mandated not to insist for collateral security in the case of loans up to 10 lakh extended to the units in the Micro Small Enterprises sector.
Is PMMY loans applicable to all Banks all over India?
Yes. Department of Financial Services (DFS) vide its letter dated May 14, 2015 have advised all PSBs, RRBs and Scheduled Cooperative Banks regarding roll out of PMMY and to cover all loans up to loan size of  10 lakhs sanctioned on or after April 08, 2015 for income generation under PMMY. DFS have also been issuing various instructions including fixing of targets branch wise to the Head Offices of the Banks which has been advised to percolate the same to their zonal / regional / branch offices.
Is obtention of PAN card a must to avail PMMY loans?
PAN card is not compulsory to avail PMMY loans. However, the borrower may have to satisfy the KYC requirements of the financing institutions.

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