Definition
Pradhan Mantri Mudra Yojana
PM Mudra Yojana provides collateral-free loans to small and micro non-corporate businesses through banks and other lenders to support self-employment.
PM Mudra Yojana (PMMY) refinances and guarantees small-ticket loans to micro and small enterprises through the Micro Units Development and Refinance Agency (MUDRA). Loans are categorised into tiers by size to suit borrowers at different stages of growth, from tiny start-ups to established micro units.
The scheme targets non-farm income-generating activities and aims to formalise and fund the vast unorganised micro-enterprise sector, a major source of livelihoods. By providing collateral-free credit, it seeks to bring small entrepreneurs into the formal lending system.
Related terms
- Pradhan Mantri Jan Dhan YojanaPM Jan Dhan Yojana is the financial inclusion scheme that provides basic, no-frills bank accounts to unbanked households, often with overdraft and insurance benefits.
- Stand-Up India SchemeStand-Up India facilitates bank loans to Scheduled Caste, Scheduled Tribe and women entrepreneurs to set up greenfield enterprises.
- Startup IndiaStartup India is the government initiative to nurture startups through tax benefits, simpler compliance, funding support and recognition.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.