Pradhan Mantri Mudra Yojana (PMMY) - Indian Polity

To enable every last mile financer to lend credit to all types of businesses in the country, the MUDRA- Micro Units Development and Refinance Agency bank was established as a public sector financial institution. Low rate loans are provided by micro financers under this scheme.

This Government scheme is an important topic for the IAS Exam. Subjects related to this topic are Indian Polity and Social Justice from General Studies paper 2 as well as Indian Economy from general Studies paper 3 of the UPSC Syllabus.

Candidates can find more articles related to the various schemes launched by the Government of India by visiting the Government Schemes page now!!

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Pradhan Mantri Mudra Yojana

Launched in April 2015 by the Prime Minister, the Mudra Yojana aims to enable Micro Finance Institutions (MFIs), Non-Banking financial institutions/Companies (NBFCs), Small Finance Banks, RBRs, Commercial Banks, Cooperative Banks, etc. to provide Low Rate Loans to eligible entities.

Mudra Logo

Candidates can know the detailed information about the Pradhan Mantri Mudra Yojana on the Official Website.

PMMY Eligibility

To avail of the benefits of the PMMY Scheme, the person should be a citizen of India. The loans are basically for people having a business plan in a Non-Farming Sector with Income generating activities like the following:

  • Manufacturing
  • Processing
  • Trade
  • Service Sector
  • Or any other fields whose credit demand is less than ₹10 lakhs.

The Indian Citizen seeking MUDRA Loans under the PMMY Scheme will have to approach either an MFI, Bank or NBFC to avail it.

Objectives of Pradhan Mantri Mudra Yojana –

  1. Funding the unfunded – To sanction loans up to rupees 10 Lakhs to those who have a business plan to generate income from a non-farm activity like manufacturing, processing, trading, or service sector but don’t have enough capital to invest
  2. Reducing jobless economic growth – To help generate sources of employment and increase the overall GDP by providing micro-enterprises with credit facilities.
  3. Monitoring and regulating the Microfinance institutions (MFI) –  With the help of MUDRA bank, the network of microfinance institutions will be monitored and new registration will also be done.
  4. Integration of Informal economy into Formal sector – It will help India also grow its tax base as incomes from the informal sector are non-taxed.
  5. Promoting financial inclusion – PMMY further adds to the vision of financial inclusion with the aim to reach the last mile credit delivery to micro-businesses and taking the help of technology solutions.

Types of PMMY Loans

The Pradhan Mantri Mudra Yojana (PMMY) has three products as per the funding requirements of the Beneficiary or the Entrepreneur.

Name of the Type of Loan Coverage of the Loan
Shishu <  ₹50,000
Kishor Above ₹50,000 up to ₹5,00,000
Tarun Above  ₹5,00,000 up to  ₹10,00,000

Sectors Covered under PMMY

To maximize coverage of beneficiaries and tailor products to meet requirements of specific business activities, sector/activity focused schemes would be rolled out. To begin with, based on the higher concentration of businesses in certain activities/sectors, schemes are proposed for:

Sector Comments Types of Activities under that Sector

Land Transport Sector

Loans to support the purchase of transport vehicles. These vehicles could be used for goods or personal transport.
  • Auto-rickshaws, E- rickshaws, etc.
  • Passenger cars and taxis.
  • Small-goods transport vehicles.
  • Other three-wheelers.
Service Sector This includes community services, social services, or personal services.
  • Hair and beauty salons, beauty parlours, etc.
  • Tailoring stores, boutiques, dry cleaning services, etc.
  • Gymnasium, Athletic training, medical shops, etc.
  • Garage, Cycle & motorcycle repair centres, etc.
  • Other services like photocopying shops, courier agencies, etc.
Food Product Sector Support for small scale food industries.
  • Manufacturing papads, pickles, jams/jellies, and other agricultural produce/preservation methods.
  • Sweet shops, small service food centres, etc.
  • Everyday catering services, canteens, etc.
  • Micro cold storages, ice-making factories, Cold chain vehicles, ice cream making industries, etc.
  • Bakeries and Baked products manufacturing.
Textile Sector Supporting micro textile industries that produce garment and non-garment products.
  • Handloom and power loom industry
  • Handwork industry like embroidery, chikan work, dyeing and printing, knitting, etc.
  • Mechanical or computerized stitching for garments and non-garments.
  • Production of automobile and furnishing accessories, etc.

Pradhan Mantri Mudra Yojana (PMMY):- Download PDF Here

Related Links:

Pradhan Mantri Jan-Dhan Yojana Pradhan Mantri Fasal Bima Yojana
Pradhan Mantri LPG Panchayat National Rural Health Mission
IAS 2022 NCERT Books PDFs For UPSC


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