Modi Government Announces ₹20 Lakh Collateral-Free Loans for Startups Under PM Mudra Yojana

PM Mudra Yojana Expansion Boosts Opportunities for New Entrepreneurs

The Modi government has expanded its flagship Pradhan Mantri Mudra Yojana (PMMY), now offering loans up to ₹20 lakh without any requirement for collateral. Originally launched on April 8, 2015, the PM Mudra Yojana aims to empower small entrepreneurs, roadside vendors, shopkeepers, women, and young job-seekers by providing easy access to capital for business ventures.

Over the past decade, the scheme has sanctioned more than 52 crore loans, distributing over ₹33 lakh crore to support small businesses across India. The recent enhancement of the loan limit is expected to further strengthen India’s startup ecosystem.

Mudra Loan Categories: Tailored Support for Different Business Needs

The PM Mudra Yojana offers loans across four categories, catering to entrepreneurs at various stages of their business journey:

• Shishu Loan: Up to ₹50,000 for first-time small business owners such as tea vendors and beauty parlors.

• Kishore Loan: ₹50,000 to ₹5 lakh for expanding existing businesses.

• Tarun Loan: ₹5 lakh to ₹10 lakh for growing established ventures like manufacturing units and franchise outlets.

• Tarun Plus Loan: ₹10 lakh to ₹20 lakh, introduced for the financial year 2024-25, for entrepreneurs who have successfully repaid previous Mudra loans and wish to expand further.

The addition of the “Tarun Plus” category reflects the government’s commitment to nurturing growth-ready businesses.

Key Benefits and Easy Application Process

The PM Mudra Yojana offers multiple advantages designed to facilitate business success:

• No Collateral Required: Entrepreneurs can access funding without the need for a guarantee.

• Mudra Rupay Card: Loan recipients receive a debit card to easily manage and access loan funds.

• Overdraft Facility: Additional financial flexibility through an overdraft option.

• Low Interest Rates: Affordable repayment options for small business owners.

• Transparent, Digital Process: A streamlined, fully online application process eliminates the need for intermediaries.

How to Apply for a Mudra Loan Online

Eligible applicants can follow these simple steps:

Visit the official Mudra Yojana website.

Register by creating a new profile and filling in personal and business details.

Select the appropriate loan category (Shishu, Kishor, Tarun, or Tarun Plus).

Choose a preferred bank or financial institution.

Verify the application with an OTP sent to your registered mobile number or email.

Upload required documents, including Aadhaar card, PAN card, business proof, and bank statements.

Submit the completed application for bank review and approval.

Eligibility Criteria

Applicants must:

• Be Indian citizens aged 18 or older.

• Run or intend to start a micro, small, or medium business.

• Maintain a good credit history.

• Meet any specific conditions set by the chosen financial institution.

The Modi government’s expansion of the PM Mudra Yojana is poised to create fresh avenues for entrepreneurship, fueling India’s vision of becoming a global hub for startups and small businesses.