Context: During his speech at Rozgar the Prime Minister has said that the Mudra loan project for small and micro enterprises has created over eight crore new entrepreneurs.

About Pradhan Mantri Mudra Yojana(PMMY)

• Launched in: 2015

• Aim: To provide collateral-free loans of up to Rs. 10 Lakh to small/micro enterprises.

• Lending Institutions: The loans 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. 

• Activities covered: The loans are given for income-generating activities in manufacturing, trading and services sectors and for activities allied to agriculture.

• Categories: MUDRA loans are offered in three categories namely: 1) Shishu: covering loans up to Rs. 50,000/ 2) Kishore: covering loans above Rs. 50,000/- and up to Rs. 5 lakhs and 3) Tarun: covering loans above Rs. 5 lakh and up to Rs. 10 lakhs.

• MUDRA Card: It is an innovative credit product wherein the borrower can avail of credit in a hassle-free and flexible manner. It provides a facility of working capital arrangement in the form of an overdraft facility to the borrower. 

• Since a MUDRA Card is a RuPay debit card, it can be used for drawing cash from an ATM or Business Correspondent or making a purchase using a Point of Sale (POS) machine. 

• Facility is also there to repay the amount, as and when, surplus cash is available, thereby reducing the interest cost.

What are the steps taken to improve the implementation of the Scheme?

• Provision for online applications through PSB loans in 59 minutes and Udyamimitra portal,

• Intensive publicity campaigns for increased visibility of the scheme amongst the stakeholders, 

• Nomination of MUDRA Nodal Officers in Public Sector Banks (PSBs),

• Periodic monitoring of the performance of PSBs with regard to PMMY.