New Delhi
The government has increased the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) from Rs 10 lakh to Rs 20 lakh, following Finance Minister Nirmala Sitharaman’s announcement in the Union Budget 2024-25, a statement said on Friday.
A new category called ‘Tarun Plus’ has been introduced to provide loans ranging from Rs 10 lakh to Rs 20 lakh. This option will be available to entrepreneurs who have successfully repaid previous loans under the existing ‘Tarun’ category.
The Department of Financial Services announced on X, ‘Great news for small business owners! The guarantee coverage for PMMY loans up to Rs 20 lakh will now fall under the Credit Guarantee Fund for Micro Units (CGFMU). Supporting dreams, one step at a time.’
According to a notification from Joint Secretary Prashant Kumar Goyal, the fund will cover micro loans extended by member lending institutions to eligible borrowers, provided the institutions apply for guarantee coverage within the specified timeframe.
Additionally, an overdraft loan amount of Rs 10,000 sanctioned under the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts will also qualify for coverage under the Credit Guarantee Fund. Micro loans under PMMY, including those sanctioned since April 8, 2015, will be eligible for this guarantee.
This enhancement is aimed at promoting the growth of entrepreneurs and supporting their expansion, aligning with the government’s commitment to fostering a robust entrepreneurial ecosystem. MUDRA Ltd. has been established to support the development and financing of micro loans, offering loans categorized as ‘Shishu’ (up to Rs 50,000), ‘Kishor’ (above Rs 50,000 and up to Rs 5 lakh), ‘Tarun’ (above Rs 5 lakh and up to Rs 10 lakh), and now ‘Tarun Plus’ (above Rs 10 lakh and up to Rs 20 lakh).
