The Pradhan Mantri MUDRA Yojana or commonly known as the ‘PMMY,’ is a scheme launched by the Hon’ble Prime Minister Narendra Modi in 2015. It is designed to support the unprivileged or otherwise ignored sections of society by providing them business loans up to Rs. 10 lakhs. In perspective, the scheme enables the so-called frailer classes to seek financial assistance and bolster their contributions towards the country’s overall growth.
With a vision to support entrepreneurship and self-employment, the PMMY has especially proven to be a boon for women entrepreneurs in India. As per reports, more than 75 percent of total disbursement under the scheme has been directed towards women. It wouldn’t be wrong to say then that women entrepreneurs are its biggest beneficiaries.
Let us have a look at how the PMMY is Benefiting the women entrepreneurs in India:
Mudra Loan under the PMMY
Short for Micro-Units Development and Refinance Agency, Mudra was launched under the PMMY in 2015. It is aimed to strengthen micro, small, and medium enterprises by ‘funding the unfunded.’ Under the scheme, small finance banks, commercial banks, RFBs, MFIs, cooperative banks, and NBFCs offer loans (up to Rs. 10 lakhs) to applicants from smaller or unprivileged pockets of society.
Depending upon the needs of one’s business, women entrepreneurs have been able to avail three types of Mudra Loans under the scheme, namely – Shishu (business loans up to Rs. 50,000), Kishor (business loans between Rs. 50,000- Rs. 5 lakh), and Tarun (business loans up between Rs. 5 lakh – Rs. 10 lakh).
Special Preference to Women under the Scheme
Back in 2019, Smriti Irani, in a statement, remarked that there were 14 crore SME loans processed to date, and of every SME loan, nearly 75 went to women entrepreneurs. She went on to say that these numbers are definite proof of the entrepreneurial talent that Indian women possess which is going to grow leads and bounds in the coming years.
Women aiming to earn a livelihood and enter the organized sector receive special preferences under the PMMY scheme. In addition to any business loan, women entrepreneurs could also benefit from additional facilities or perks provided by the financing institutions. For instance, MFIs and NBFCs are currently offering business loan interest rates reduced by 25bps to women.
Those willing to start, expand, or modernize their business or small-scale services ranging from catering, tailoring, beauty parlor services, and so on can avail the different types of Mudra loans under the PMMY. Similarly, those heading production or manufacturing units or those willing to acquire skills to support their business can also receive financial assistance under the PMMY.
Key Benefits of the Scheme
One of the biggest benefits of the PMMY is that the business loan eligibility under the scheme is comparatively eased out. At the same time, the need for collateral is also done away with. This could be a blessing for women who come from socially and financially difficult backgrounds. Since applicants are not required to pledge their valuable assets with the lender, they can take on loans with more confidence and a lot less worry. To calculate the amount, you’ll need to use a business loan EMI calculator.
Another benefit under the PMMY is that the government is the credit guarantor for the borrower. This means that in situations where the applicant is unable to pay the loan, they will not be harassed by the lenders. Instead, the government will repay the loan amount on their behalf. This provides further impetus to women willing to start their own businesses.
To apply for the Mudra loan under the PMMY, women entrepreneurs simply need to zero in on their business idea, fill the PMMY application form, and get, set, go!! After all, as they say, the sky’s the limit!