New Delhi: The Pradhan Mantri Mudra Yojana (PMMY), launched in 2015 to support small businesses and entrepreneurs, provides collateral-free loans of up to ₹20 lakh through banks and financial institutions, the government informed Parliament.
According to information provided by the Department of Financial Services (DFS), the scheme was launched on April 8, 2015, to extend credit support to small enterprises engaged in manufacturing, trading, services and agriculture-allied activities. Loans under the scheme are provided by Member Lending Institutions, including Scheduled Commercial Banks, Non-Banking Financial Companies and Micro Finance Institutions.
Individuals with viable business plans for small enterprises are eligible to apply for loans under the scheme. The loans are categorised into four segments based on the amount required.
Under the Shishu category, loans of up to ₹50,000 are provided, while the Kishor category covers loans above ₹50,000 and up to ₹5 lakh. The Tarun category offers loans above ₹5 lakh and up to ₹10 lakh.
To encourage successful borrowers, the government introduced a new category called Tarun Plus from October 24, 2024. Under this category, entrepreneurs who have successfully repaid their earlier loans under the Tarun category can avail collateral-free loans ranging from ₹10 lakh to ₹20 lakh.
The scheme has played an important role in supporting small businesses, traditional enterprises, handicrafts and agriculture-allied activities. It has also helped women entrepreneurs who often face challenges in accessing credit due to lack of collateral or credit history.
To simplify the loan application process and ensure timely disbursal, the government has also launched digital platforms such as the Jan Samarth portal, which integrates multiple credit-linked schemes and enables applicants to apply for loans through a self-service or assisted process.
This information was provided by Minister of State for Micro, Small and Medium Enterprises Shobha Karandlaje in a written reply in the Lok Sabha on March 12, 2026.
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