Pradhan Mantri Mudra Yojana

Why in News?
The Pradhan Mantri Mudra Yojana (PMMY) has facilitated the sanctioning of over 28.68 crore loans, amounting to approximately ₹14.96 lakh crore, by banks, NBFCs, and MFIs since its inception.

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Key Points 
About Pradhan Mantri Mudra Yojana (PMMY)
1. Launch and Objective

• Launched in 2015, the scheme aims to provide loans of up to ₹10 lakh to non-corporate and non-farm small/micro-enterprises.
• It focuses on fostering entrepreneurship and financial inclusion among underserved sections of society.

2. Funding Mechanism

• MUDRA (Micro Units Development & Refinance Agency Ltd.), a financial institution established by the government, facilitates funding for small businesses.
• It operates through last-mile financial institutions such as banks, NBFCs, and MFIs.
• Note: MUDRA does not directly lend to individuals or businesses.

3. Loan Products
MUDRA offers three distinct products based on the business stage and funding requirements:

• Shishu: Loans up to ₹50,000 for budding enterprises.
• Kishore: Loans between ₹50,000 and ₹5 lakh, targeting growing businesses.
• Tarun: Loans from ₹5 lakh to ₹10 lakh, catering to established enterprises needing higher funding.

4. Features

• Collateral-Free Loans: Borrowers are not required to provide security for loans under PMMY.
• Inclusive Approach: Special emphasis is placed on financing women entrepreneurs, SC/ST/OBC communities, and individuals from minority groups.

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Achievements of PMMY
1. Employment Generation

• According to a Ministry of Labour and Employment survey, PMMY contributed to creating 1.12 crore net additional jobs between 2015 and 2018.
• Of this, 62% (69 lakh jobs) were generated by women entrepreneurs.

2. Empowering Disadvantaged Groups

• Loans have been predominantly extended to economically weaker sections, enabling financial independence and entrepreneurship development.

3. Scale of Impact

• Since its launch, the scheme has revolutionized the availability of credit for small businesses, directly benefiting millions of entrepreneurs across the country.

PMMY is a key enabler of economic empowerment and grassroots development, contributing significantly to India's inclusive growth narrative.

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