PM MUDRA SCHEME

Why in News?                                                                                                        

Union Finance and Corporate Affairs Minister Nirmala Sitharaman said women entrepreneurs are accorded first priority under the Centre’s flagship Pradhan Mantri Mudra Yojana scheme which offers financial assistance to beneficiaries.

What is PM MUDRA scheme?

• launched on 8 April 2015 by Prime Minister Shri Narendra Modi.
• facilitate easy collateral-free micro credit of up to ₹10 lakh to non-corporate, non-farm small and micro entrepreneurs for income generating activities.
• provided by Member Lending Institutions (MLIs), i.e., Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.
• The loans have been divided into three categories based on the need for finance and stage in maturity of the business.
• Shishu (loans up to ₹50,000/-)
• Kishore (loans above ₹50,000/- and up to ₹5 lakh)
• Tarun (loans above ₹5 lakh and up to ₹10 lakh).
• Loans under PMMY are provided to meet both term loan and working capital components of financing for income generating activities in manufacturing, trading and service sectors, including activities allied to agriculture such as poultry, dairy, beekeeping, etc.
• The rate of interest is decided by lending institutions in terms of RBI In case of working capital facility, interest is charged only on money held overnight by borrower.