Pradhan Mantri Mudra Yojana (PMMY)

PMMY provides collateral-free loans to small entrepreneurs. The scheme helps them start or grow non-farm MSEs with easy loans. Since 2015, it has successfully boosted grassroots economic growth and entrepreneurship.

Highlights

• Collateral-free loans up to ₹10 lakh and up to ₹20 lakh for repeat borrowers under the Tarun Plus category.
• Loan is accessible via banks, Non-Banking Financial Companies (NBFCs), Microfinance Institutions (MFIs), and cooperative institutions.
• Flexible repayment up to 5 years with competitive interest rates.
• The scheme especially focuses on supporting women, SC/ST, and OBC entrepreneurs.

What is PMMY?

• This flagship scheme was launched on April 8, 2015, by the Government of India.
• It offers collateral-free loans to non-corporate, non-farm SMEs.
• The scheme supports manufacturing, trading, services, and agriculture-related activities.
• Targets businesses lacking formal credit access to help them grow.

Objectives

• Facilitate easy loans for new or existing small businesses.
• Promote self-employment and entrepreneurship.
• Boost local economic growth by creating new job opportunities.

Benefits of the PMMY Scheme

• Quick Access to Loans
  Provides collateral-free loans up to ₹10 lakh for small businesses. Repeat borrowers get up to ₹20.
• No Collateral Required
  Loans are given without the need for security. First-time entrepreneurs can access the funding easily.
• Inclusive Lending
  Supports women, SC/ST, and OBC entrepreneurs to help them grow their businesses and become financially independent.
• Supports All Business Stages
  Caters to startups, growing businesses, and established enterprises through different loan categories.

Financial Assistance Under the PMMY Scheme

Interest Rates and Fees

• Rates differ based on the lender and borrower profile.
• Minimal or no processing fees for small loans.

Repayment

• Flexible tenure up to 5 years.

Eligibility for PMMY Loan

You are eligible if:

• You are an Indian citizen with a practical business plan.
• You are running a new or existing business.
• Your business is a non-farm MSE in the manufacturing, trading, or services sector.

You are not eligible if:

• You are looking to buy agricultural farmland or practice regular farming.
• Your loan requirement exceeds ₹20 lakh.

Documents Required for PMMY Loan

• Proof of identity and address, such as Aadhaar Card, PAN Card, etc.
• Proof of business address and existence
• Business plan or proposal
• Recent passport-sized photographs

Application Process for PMMY Loan

You can apply:

• Online on the PMMY portal.
• Offline by visiting the participating bank/ Microfinance Institutions (MFI)/ Non-Banking Financial Companies (NBFCs) branch.

Examples of Where PMMY Loan Can be Used

• Toy and gift shops for local customers.
• Auto rickshaw services for affordable transport.
• Herbal, steel, and broom manufacturing units
• Fertiliser and pesticide trading businesses
• Tailoring and salon services
• Mobile and mechanic repair shops
• Tea stalls and small eateries catering to local taste