PM Mudra Yojana (PMMY)
Funding the unfunded — collateral-free loans for micro enterprises.
The Pradhan Mantri Mudra Yojana (PMMY) was launched on 8 April 2015. MUDRA stands for Micro Units Development and Refinance Agency. The scheme provides collateral-free institutional credit to non-corporate, non-farm small and micro enterprises to help them grow and generate employment.
Scheme at a Glance
| Launched | 8 April 2015 |
| MUDRA Full Form | Micro Units Development & Refinance Agency |
| Lead Ministry | Ministry of Finance |
| Loan Type | Collateral-free micro credit |
| Loan Limit | Up to ₹10 lakh (enhanced to ₹20 lakh under Tarun Plus) |
Three Loan Categories
- Shishu: Loans up to ₹50,000 — for new and early-stage businesses.
- Kishore: Loans above ₹50,000 and up to ₹5 lakh — for growing businesses.
- Tarun: Loans above ₹5 lakh and up to ₹10 lakh — for established businesses needing expansion.
- Loans are provided through banks, NBFCs and Micro Finance Institutions (MFIs).
- A large share of Mudra loans have been availed by women and first-generation entrepreneurs.
- A Tarun Plus category allows enhanced loans up to ₹20 lakh for those who repaid earlier Tarun loans.
Practice MCQs
Q1. In which year was the PM Mudra Yojana launched?
a) 2014 b) 2015 c) 2016 d) 2017
Answer: b) 2015
Q2. What does MUDRA stand for?
a) Micro Units Development & Refinance Agency b) Money Development Authority c) Micro Urban Development Agency d) Major Units Refinance Agency
Answer: a) Micro Units Development & Refinance Agency
Q3. Which category covers loans up to ₹50,000?
a) Shishu b) Kishore c) Tarun d) Yuva
Answer: a) Shishu
Q4. The standard maximum Mudra loan amount under the Tarun category is:
a) ₹5 lakh b) ₹10 lakh c) ₹15 lakh d) ₹25 lakh
Answer: b) ₹10 lakh
Q5. Mudra loans are:
a) Collateral-based b) Collateral-free c) Only for farmers d) Only for exporters
Answer: b) Collateral-free