The Finance Minister announced in the Union Budget 2024-25 that the limit of Mudra loans under the PMMY has been increased from Rs.10 lakh to Rs.20 lakh.
Reetu | Oct 28, 2024 |
Govt doubled Pradhan Mantri Mudra Yojana Loan limit to Rs.20 Lakh as per Budget Announcement
The Finance Minister announced on July 23, 2024, in the Union Budget 2024-25 that the limit of Mudra loans under the Pradhan Mantri Mudra Yojana (PMMY) has been increased from Rs.10 lakh to Rs.20 lakh. This increase aims at achieving the ultimate goal of the Mudra Scheme, which is to fund the unfunded.
The increase is especially advantageous to upcoming entrepreneurs, facilitating their growth and expansion. The decision is consistent with the government‘s commitment to supporting a healthy entrepreneurial ecosystem.
According to the notification issued, the new Tarun Plus category is for loans of more than Rs.10 lakh and up to Rs.20 lakh, and it will be available to entrepreneurs who have previously obtained and successfully repaid Tarun loans. PMMY loans up to Rs. 20 lakh would be guaranteed by the Credit Guarantee Fund for Micro Units (CGFMU).
The Notification Read as Follows:
In partial modification of MINISTRY OF FINANCE (Department of Financial Services), New Delhi NOTIFICATIONS S.O. 1443(E) dated 18th April 2016, S.O. 1261(E) dated 16th April 2020, S.O. 2668(E) dated 01st July 2021, S.O. 457(E) dated 31st January 2023 and S.O. 1361(E) dated 21st March 2023 appearing in the Gazette of India: EXTRAORDINARY PART II – Section 3 – Sub-section (ii) publishing the Scheme of Credit Guarantee Fund for Micro Units (CGFMU) (hereinafter referred to as the said Scheme), the Central Government hereby makes the following amendments to the Scheme, namely:-
1. Paragraph 2 (xi) of Chapter I of Notification number S.O. 1443(E) dated 18th April 2016 has been modified and shall read as:
“Micro Loan” means any financial assistance by way of collateral-free/third-party guarantee-free loan/limit (currently Rs.20 lakh), extended by the lending institution to the eligible borrower, as per the guidelines prescribed by the Fund. Under the aegis of Pradhan Mantri MUDRA Yojana, MUDRA Ltd. has already been created to support the development and financing of microloans. The schematic interventions of MUDRA Ltd. have been named ‘Shishu’, ‘Kishor’ ‘Tarun’ and ‘Tarun Plus’ to signify the stage of growth/development and funding needs of the beneficiary micro unit/entrepreneur and also provide a reference point for the next phase of graduation/growth. They are presently defined as:
Further, an Overdraft facility of Rs.10,000 sanctioned under PMJDY accounts shall also be eligible to be covered under the Credit Guarantee Fund.
2. Paragraph 2 (xii) of Chapter I Notification S.O. 1443(E) dated 18th April 2016 has been modified and shall read as:
“Eligible borrower” means new or existing micro unit/enterprise, including micro unit/enterprise set up under Joint Liability Group (JLG) framework, individually or jointly (irrespective of the availability of guarantee under JLG), falling under any sector covered under PMMY or as defined in the MSMED Act, 2006 (as amended from time to time), who meets eligibility criteria prescribed by the Fund and whose credit requirement does not exceed the specified limit under PMMY. The specified limit of the loan shall be Rs.20 lakh as defined above or such other amount as may be decided by the Fund from time to time. Further, an Overdraft loan amount of Rs.10,000 sanctioned under PMJDY accounts shall also be eligible to be covered under the Credit Guarantee Fund. Eligible borrowers would also mean Self Help Groups who meet eligibility criteria prescribed by the Fund and whose loan amount is above Rs.10 lakh and upto Rs.20 lakh.”
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