PMMY Loan Limit Raised to Spur Entrepreneurial Growth
In a significant move to bolster entrepreneurial activity, the Indian government has announced an increase in the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) from ₹10 lakh to ₹20 lakh. This change, introduced alongside the Union Budget for 2024-25, aims to provide more substantial financial backing for India’s budding entrepreneurs, particularly in the small and medium enterprise (SME) sector. The initiative adds a new category, 'Tarun Plus', which expands loan availability to meet the growing capital needs of small businesses.

Introducing 'Tarun Plus'
Under the PMMY, loans were previously divided into three categories: Shishu (loans up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh). With the introduction of Tarun Plus, the program now accommodates loan requests up to ₹20 lakh, ensuring that entrepreneurs looking to scale their ventures have better access to funds. This measure is expected to not only facilitate larger projects but also to attract new participants by offering greater financial support.

Credit Guarantee and Financial Support
The government has announced that loans under this enhanced limit will be covered by the Credit Guarantee Fund for Micro Units (CGFMU). This guarantee coverage helps reduce risks for lenders, encouraging financial institutions to expand loan offerings to small business owners and self-employed individuals. With increased backing from CGFMU, credit institutions and banks are likely to be more willing to extend loans, broadening the reach of the PMMY.

Economic Empowerment and Employment Generation
Raising the loan limit aligns with the government’s mission of promoting self-employment, boosting economic growth, and creating job opportunities. The PMMY loan structure aims to empower small businesses and entrepreneurs by enabling them to finance larger business activities, expand operations, and meet demand more effectively.

The PMMY’s revised loan structure is a step towards realizing the government’s vision of a self-reliant and economically vibrant India. The increased loan limit, coupled with government-backed guarantees, provides entrepreneurs with the resources needed to build and sustain businesses in a competitive market.

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