Mudra loan limit enhanced to encourage good borrowers: Secretary, Financial Services
Jul 23, 2024
New Delhi [India], July 23 : The Union government doubled the limit of Mudra loans to encourage good borrowers, a significant move announced in the Union Budget 2024-25.
Vivek Joshi, Secretary to the Department of Financial Services, Ministry of Finance said in an interaction with ANI that the intention of the extension is to incentivize those who were quick in repaying the earlier loans.
The limit of Mudra loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the 'Tarun' category.
"If you closely study this announcement, the eligibility for getting Rs 20 lakh is only if you have repaid the earlier Rs 10 lakh. So in that sense, it will be catering to the kind of good borrowers who have utilized the money in a better way and repaid the loans. Then only he becomes eligible," Joshi told ANI.
Clarifying the eligibility for getting the extended loan amount, he said that the borrower need to prove his credibility in order to avail the 20 lakh under the Mudra Yojna.
"One has to to first prove his creditworthiness by taking loans up to 10 lakh. And once he has repaid, then he only becomes eligible," the DFS Secretary said.
The Pradhan Mantri MUDRA Yojana (PMMY) was launched on April 8, 2015 by Prime Minister Shri Narendra Modi with the aim to facilitate easy collateral-free micro credit of up to Rs 10 lakh to non-corporate, non-farm small and micro entrepreneurs for income generating activities.
The loans under PMMY are provided by Member Lending Institutions (MLIs), i.e., Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.
Addressing the nation from the Red Fort on the occasion of the 77th Independence Day, Prime Minister Narendra Modi lauded the transformative power of MUDRA Yojana.
Highlighting the success of the MUDRA Yojana, PM celebrated its role in transforming nearly 10 crore citizens into entrepreneurs and job creators.
He explained how this initiative, backed by a substantial budget exceeding Rs 20 lakh crore, led to the creation of eight crore new businesses, subsequently generating employment opportunities for millions.
