The Pradhan Mantri Mudra Yojana or PMMY is a flagship scheme of the Government of India to extend affordable credit to micro and small enterprises.
Mudra loans are designed to bring enterprises into the formal financial system, or to “fund the unfunded”. Loans under PMMY scheme are available to non-farm micro or small enterprises engaged in income generation through manufacturing, trading and services. Enterprises involved in allied agricultural activities can also apply for Mudra loans.
- The Mudra loan scheme offers credit facilities to micro and small enterprises engaged in income generation.
- One of the key benefits of a Mudra loan is that borrowers are not required to provide security or collateral. Additionally, there are no processing charges on Mudra loans.
- The credit facilities extended under the PMMY can be for any type of fund or non-fund based requirements. Hence, borrowers can use the Mudra loan scheme for a variety of purposes. The credit from Mudra loans can be used for term loans and overdraft facilities, or to apply for letters of credit and bank guarantees.
- There is no minimum loan amount for Mudra loans.