Under the aegis of Pradhan Mantri Mudra Yojana (PMMY), MUDRA has created products/ schemes. The interventions have been named ‘Shishu’, ‘Kishore’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to :
With an objective to promote entrepreneurship among the new generation aspiring youth, it is ensured that more focus is given to Shishu Category Units and then Kishore and Tarun categories.
Within the framework and overall objective of development and growth of micro enterprises sector under Shishu, Kishore and Tarun, the products being offered by MUDRA are so designed, to meet requirements of different sectors / business activities as well as business/ entrepreneur segments.
The funding support from MUDRA are of two types:
Micro Credit Scheme is offered mainly through Micro Finance Institutions (MFIs), who deliver the credit up to 1 lakh, for various micro enterprise / small business activities. Although the model of delivery may be through SHGs/JLGs/ Individuals, the loans are given by the MFIs to individual entrepreneurs for specific income generating micro enterprise/ small business activities.
Different banks like Commercial Banks, Regional Rural Banks, Small Finance Banks and NBFCs are eligible to avail of refinance support from MUDRA for financing micro enterprise activities. The refinance is available for term loan and working capital loan up to an amount of 10 lakh per unit. The eligible banks/NBFC, who comply to the requirements as notified, can avail of refinance from MUDRA for the loans given by them for eligible MUDRA compliant activities under Shishu, Kishore and Tarun categories. In order to encourage women entrepreneurs, the financing banks / MFIs may consider extending additional facilities, including interest reduction on their loan. At present, MUDRA extends a reduction of 25bps in its interest rates to MFIs / NBFCs, who are providing loans to women entrepreneurs.
Mudra loan is extended for a variety of purposes which result in income generation and employment creation. The loans are extended mainly for:
Following is an illustrative list of the activities that can be covered under MUDRA loans:
Purchase of transport vehicles for transportation of goods and passengers such as auto rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, taxis, etc. Tractors/Tractor Trolleys/Power Tillers used only for commercial purposes are also eligible for assistance under PMMY. Two Wheelers used for commercial purposes are also eligible for coverage under PMMY.
Salons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shops, DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc.
Activities such as papad making, achaar making, jam/jelly making, agricultural produce preservation at rural level, sweet shops, small service food stalls and day to day catering / canteen services, cold chain vehicles, cold storages, ice making units, ice cream making units, biscuit, bread and bun making, etc.
Handloom, powerloom, khadi activity, chikan work, zari and zardozi work, traditional embroidery and hand work, traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non garment products such as bags, vehicle accessories, furnishing accessories, etc.
Financial support for on lending to individuals for running their shops / trading & business activities / service enterprises and non-farm income generating activities with beneficiary loan size of up to 10 lakh per enterprise / borrower.
Setting up micro enterprises by purchasing necessary machinery / equipments with per beneficiary loan size of upto 10 lakh.
‘Activities allied to agriculture’, e.g. pisciculture, bee keeping, poultry, livestock-rearing, grading, sorting, aggregation agro industries, diary, fishery, agri-clinics and agribusiness centres, food & agro-processing, etc.(excluding crop loans, land improvement such as canal, irrigation and wells) and services supporting these, which promote livelihood or are income generating shall be eligible for coverage under PMMY in 2016-17.
Traditional institutional financing in Indian context adopts an Asset Based Lending Approach with emphasis on collateral security. Micro units, most of the times, are unable to provide the comfort of collateral. Hence, MUDRA loans, i.e., loans up to 10 lakh, have been made collateral free, as per the RBI norms in this regard.
To mitigate the issue of collateral and to provide comfort to the lending institutions, a Credit Guarantee Product is extended by creation of a Fund called “Credit Guarantee Fund for Micro Units” [CGFMU]. All eligible micro-loans sanctioned since April 08, 2015 are covered under the above guarantee. The Scheme is being managed by National Credit Guarantee Trustee Company Ltd. [NCGTC], an agency promoted by the GOI. The Guarantee product is one of the key interventions made with the objective of bringing down the cost of funds and facilitating ease of access to institutional credit for the end beneficiary to improve his creditworthiness.
