Government Doubles Loan Limit for Small Businesses Under Pradhan Mantri Mudra Yojana to Rs 20 Lakh

The Finance Ministry has increased the loan limit under the Pradhan Mantri Mudra Yojana (PMMY) to Rs 20 lakh, effective immediately. This change was announced by Finance Minister Nirmala Sitharaman in the Union Budget for 2024-25 on July 23, aiming to provide more financial support to new and growing entrepreneurs.

New Loan Category Introduced

A new category, called Tarun Plus, has been added for larger loans. Here’s what it means:

• Tarun Plus: Now offers loans above Rs 10 lakh, up to a maximum of Rs 20 lakh.
• Eligibility: Only available to those who have already borrowed under the “Tarun” category and successfully paid it back.

More Support with Credit Guarantee Fund

Loans up to Rs 20 lakh under this scheme are now supported by the Credit Guarantee Fund for Micro Units (CGFMU). This means:

• Government-Backed: If a borrower meets the criteria, the government will back their loan, which makes it easier to get approved.
• Overdraft Facility: Even an overdraft loan of Rs 10,000 under the PM Jan Dhan Yojana (PMJDY) accounts is also covered by this fund.

According to the notification by the Department of Financial Services, the fund aims to support eligible small businesses and help them secure financing within a specific time and following certain steps.

This expansion of the PMMY is part of the government's commitment to building a strong foundation for new and small businesses, making it easier for them to grow and succeed.

Sources: Internet Sources & Twitter X 

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