PMMY: Mudra Loan Categories, Achievements and Reforms
Why in the news
At the ten-year mark, the Pradhan Mantri Mudra Yojana was reviewed as a pillar of financial inclusion that brought formal credit to first-time entrepreneurs.
| Category | Loan size | Stage |
|---|---|---|
| Shishu | Up to ₹50,000 | Early-stage |
| Kishor | ₹50,001 to ₹5 lakh | Growing |
| Tarun | ₹5 lakh to ₹10 lakh | Established |
| Tarun Plus (new in FY25) | Up to ₹20 lakh | Expansion by existing borrowers |
Key facts
- The MSME share in total bank credit moved from 15.8% to 20% over the decade.
- Credit linked to cash flows and asset life reduced reliance on informal lenders, supporting Atmanirbhar Bharat.
- Delivered via banks, NBFCs, RRBs and MFIs, which widened rural reach and simplified procedures.
- Scope widened to allied agriculture and rural manufacturing; homestays added in Union Budget 2025.
Way forward
- Tech-based credit risk models are planned; the aim is scaling small firms, formalisation and deeper credit, backing the $5 trillion economy goal.
Exam angle
- Highest band at present: Tarun Plus, up to ₹20 lakh.
- Launch date: April 8, 2015.