Government Doubles Mudra Loan Limit to Rs 20 Lakh for Good Borrowers
The Union government has announced a significant change in the Union Budget 2024-25 by doubling the limit of Mudra loans from Rs 10 lakh to Rs 20 lakh. This change is aimed at encouraging good borrowers who have successfully repaid their previous loans under the ‘Tarun’ category.
Incentivizing Good Borrowers
Dr. Vivek Joshi, Secretary to the Department of Financial Services, explained that the new limit is only available to those who have repaid their earlier Rs 10 lakh loans. This ensures that the increased loan amount is given to borrowers who have demonstrated their ability to utilize and repay the money effectively.
Eligibility Criteria
To be eligible for the Rs 20 lakh loan, borrowers must first prove their creditworthiness by taking and repaying loans up to Rs 10 lakh. Only then can they avail the higher loan amount under the Mudra Yojana.
About Pradhan Mantri MUDRA Yojana (PMMY)
Launched on April 8, 2015, by Prime Minister Narendra Modi, the PMMY aims to provide easy collateral-free micro credit of up to Rs 10 lakh to non-corporate, non-farm small and micro entrepreneurs. The loans are provided by Member Lending Institutions (MLIs) such as Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), and other financial intermediaries.
Success of MUDRA Yojana
Prime Minister Narendra Modi highlighted the success of the MUDRA Yojana during his address on the 77th Independence Day. He noted that the initiative has transformed nearly 10 crore citizens into entrepreneurs and job creators, leading to the creation of eight crore new businesses and generating employment opportunities for millions.
Doubts Revealed
Mudra Loan -: Mudra Loan is a type of loan given by the government to small business owners to help them grow their businesses. ‘Mudra’ stands for Micro Units Development and Refinance Agency.
Rs 20 Lakh -: Rs 20 Lakh means 20,00,000 rupees. It’s a way to write large amounts of money in India.
Union government -: The Union government is the central government of India that makes decisions for the whole country.
Tarun category -: The ‘Tarun’ category is one of the three categories under the Mudra scheme, meant for bigger loans ranging from Rs 5 lakh to Rs 10 lakh.
Union Budget 2024-25 -: The Union Budget 2024-25 is a financial plan presented by the government for the year 2024-2025, detailing how money will be spent and earned.
Dr. Vivek Joshi -: Dr. Vivek Joshi is a high-ranking official in the Indian government, specifically the Secretary to the Department of Financial Services.
Department of Financial Services -: The Department of Financial Services is a part of the Indian government that looks after banks, insurance companies, and other financial institutions.
Creditworthiness -: Creditworthiness means how likely someone is to repay a loan. If you have repaid loans before, you are considered creditworthy.