Ministry of Finance is committed to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes.
“Financial needs of all stakeholders ranging from the budding entrepreneurs to the hard-working farmers has also been catered to through various initiatives. A key initiative towards this is Pradhan Mantri MUDRA Yojana (PMMY), which has given wings to the dreams and aspirations of millions, along with a feeling of self-worth and independence,” Finance Ministry said in a statement.
It further said that 4.20 crore PMMY loans were sanctioned in 2020-21, and Rs 2.66 lakh crore was allocated in 2020-21 as on March 19, 2021.
The average ticket size of the loans is about Rs 52,000, it said.
Under PMMY collateral free loans of up to Rs 10 Lakh are extended by Member Lending Institutions (MLIs) viz Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) etc.
The loans are given for income generating activities in manufacturing, trading and services sectors and for activities allied to agriculture.
The scheme was launched to encourage small businesses, and banks were asked provide collateral-free loans up to Rs 10 lakh under three categories — Shishu (up to Rs 50,000), Kishore (between Rs 50,000 and Rs 5 lakh) and Tarun (Rs 10 lakh).