The Pradhan Mantri MUDRA Yojana (PMMY)

The Pradhan Mantri MUDRA Yojana (PMMY), launched in April 2015 by the Government of India, has emerged as a transformative force in the Indian economy. Aimed at empowering micro and small enterprises, this scheme offers collateral-free loans up to ₹20 lakh, significantly enabling self-employment and economic inclusion.

At ADY & Company, a top-rated chartered accountant firm led by CA Yogesh Kumar, we have helped numerous businesses benefit from the MUDRA scheme. With extensive experience in business registration in India, foreign company registration in India, and helping clients register companies in the USA from India, we understand the challenges entrepreneurs face—and PMMY addresses many of them.

The Purpose Behind PMMY

The PMMY initiative was created to empower the underserved entrepreneurial sector, especially in rural and semi-urban areas. Traditional banking often excludes small traders, artisans, and micro-units due to collateral demands. PMMY eliminates this hurdle, offering loans with minimal formalities, nurturing business potential from the grassroots level.

Empowering the Backbone of India’s Economy

Small and micro businesses are the backbone of India’s economy, contributing massively to GDP, exports, and employment. PMMY bridges the financial gap by offering structured support through Shishu, Kishor, Tarun, and Tarun Plus categories.

Key Features of the Pradhan Mantri MUDRA Yojana

Collateral-Free Loans

One of PMMY’s biggest advantages is that no collateral is required for loans up to ₹20 lakh. This makes formal credit accessible to even first-time entrepreneurs, without the burden of pledging personal or business assets.

Loan Range and Limits

The loan structure is divided into four categories:

• Shishu: Loans up to ₹50,000 for startups and early-stage businesses.
  
  
• Kishor: ₹50,001 to ₹5 lakh for growing businesses.
  
  
• Tarun: ₹5 lakh to ₹10 lakh for established enterprises.
  
  
• Tarun Plus: ₹10 lakh to ₹20 lakh for scale-ups with successful past repayments.
  
  

No Processing Fee for Shishu Loans

To encourage early-stage entrepreneurship, Shishu loans are exempted from processing charges. This makes it even easier for small vendors, artisans, and startups to avail of the scheme.

Broad Lending Network

PMMY loans are available via a wide network of Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, MFIs, and NBFCs. Borrowers can also apply online through the Udyamimitra portal (www.udyamimitra.in).

Categories of MUDRA Loans

Shishu Loan

Ideal for very small businesses and startups, the Shishu loan supports needs like inventory purchase, equipment setup, and other foundational needs. At ADY & Co., we help clients streamline documentation to secure funding swiftly.

Kishor Loan

This mid-tier funding is designed for businesses ready to expand. From enhancing infrastructure to acquiring new machinery, Kishor loans support growth without stressing cash flow.

Tarun Loan

Tarun loans, ranging from ₹5 lakh to ₹10 lakh, target established businesses with consistent revenue. It’s perfect for those looking to diversify or enter new markets.

Tarun Plus – Beyond the Basics

For entrepreneurs with a proven repayment track under the Tarun category, Tarun Plus offers further assistance up to ₹20 lakh. This progression supports long-term scaling, allowing for business consolidation and diversification.

PMMY Eligibility Criteria

Who Can Apply

The scheme caters to non-corporate, non-farm small/micro enterprises. Eligible businesses include:

• Shopkeepers and street vendors
  
  
• Small manufacturers and artisans
  
  
• Food processors and repair shops
  
  
• Transport service providers
  
  
• Micro-enterprises in trading, manufacturing, and services
  
  

Industry and Sectoral Scope

Whether you’re into garment production, mobile repair, or food delivery, PMMY’s wide sectoral acceptance ensures that most business models can qualify.

Benefits of PMMY for Small Enterprises

Boosting Entrepreneurship

The ease of access to collateral-free loans motivates more individuals to start ventures. It reduces dependency on informal and often exploitative credit sources.

Encouraging Job Creation

As businesses grow through PMMY loans, they begin hiring, thereby contributing to local employment generation, especially in underdeveloped areas.

Financial Inclusion and Accessibility

PMMY ensures financial inclusion by reaching out to remote sectors and first-time borrowers. It enables micro-entrepreneurs to become part of the formal financial ecosystem.

Why Choose ADY & Co. for PMMY Guidance

At ADY & Co., we offer the Best CA services in Delhi and are known as a chartered accountant near me for tax filing and business advisory. Here’s why entrepreneurs trust us:

• Personalized consultancy from CA Yogesh Kumar
  
  
• End-to-end assistance in business registration in India
  
  
• Foreign company registration in India and U.S. setup for Indian entrepreneurs
  
  
• Comprehensive help with paperwork, eligibility, and online PMMY application
  
  

Whether you’re a street vendor or a small factory owner, we simplify the process and help you avail the maximum benefits under PMMY.

PMMY Performance Over the Years

The following data showcases the growing trust and outreach of PMMY over the years: