Pradhan Mantri Mudra Yojana

Description

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Context: More than 40.82 crore loans valued at Rs 23.2 lakh crore have been approved since the start of the Pradhan Mantri MUDRA Yojana (PMMY).

Details

Objectives

The Pradhan Mantri MUDRA Yojana (PMMY) was inaugurated in 2015 to provide easy collateral-free microcredit of up to Rs 10 lakh available to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.

Credit Sources

Loans under PMMY are made available by Member Lending Institutions (MLIs), which include banks, non-banking financial companies (NBFCs), microfinance institutions (MFIs), and other financial intermediaries.

Present Status

Since the scheme's introduction, around Rs 23.2 lakh crore has been sanctioned in 40.82 crore loan accounts as of March 24, 2023.
Women entrepreneurs have received around 69% of the total number of loans sanctioned.
SC/ST/OBC borrowers received 51% of the loans approved.
New Entrepreneurs have received around 21% of total loan approvals.

Keywords

Nonbank Financial Companies (NBFCs)

NBFCs are financial institutions that provide a variety of banking services but lack a banking licence. These institutions are generally not permitted to accept typical demand deposits.
The NBFC is a corporation incorporated under the Companies Act of 1956.
They make loans and advances to acquire shares/stocks/bonds/debentures/securities issued by the government or local government, or other marketable securities of a similar sort, lease, hire-purchase, insurance business, and chit business.

Must Read Articles:

Pradhan Mantri Mudra Yojana: https://www.iasgyan.in/daily-current-affairs/mudra-loan

PRACTICE QUESTION

Q. Consider the following Statement about the Pradhan Mantri Mudra Yojana;

1. The Scheme was launched for providing loans up to Rs 10 crores to non-corporate, non-farm small/micro enterprises.

2. Borrowers need to furnish some form of collateral to procure credit under the scheme.

3. Credit under the scheme is only given by Commercial Banks.

Which of the following Statement is/are incorrect?

(A) 1 and 2 only

(B) 2 and 3 only

(D) 1, 2 and 3

Answer: D

Explanation:

Statement 1 is incorrect: The scheme launched in 2015 for providing loans up to 10 lahks to non-corporate, non-farm small/micro enterprises.

Statement 2 is incorrect: The borrowers do not need to furnish any form of collateral to procure these loans. Hence, you don't need to risk your personal or business property to secure some funds.

Statement 3 is incorrect: These loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs.