Mudra Loan Limit Expanded: Get Up To ₹20 Lakhs Under New Rules

The first budget of Modi 3.0 is being presented, and Finance Minister Nirmala Sitharaman has made a significant announcement during her budget speech concerning the Prime Minister’s Mudra Scheme . The Mudra loan limit under this government scheme has been doubled, increasing from ₹10 lakh to ₹20 lakh for MSMEs .

Previously Available Loan of ₹10 Lakh

The central government runs the Prime Minister’s Mudra Scheme ( PM Mudra Yojana ) to encourage the youth of the country to pursue self-employment. Until now, loans up to ₹10 lakh were provided for starting or expanding non-corporate small enterprises in rural areas. Now, this amount has been increased to ₹20 lakh. The loan is easily accessible at affordable interest rates, and if you repay the loan on time, the interest rate can be waived.

The Finance Minister stated that those who have repaid their old dues will be eligible for double the loan amount. Therefore, those with existing loans will benefit once they repay their previous debts.

Major Announcements for MSME Relief

In her budget speech, the Finance Minister introduced a new system to enable the MSME sector to secure bank loans more easily during times of pressure. Along with increasing the Mudra loan limit from ₹10 lakh to ₹20 lakh, Nirmala Sitharaman announced a reduction in the trader limit from ₹500 crore to ₹250 crore to ensure compulsory inclusion of buyers on the traders' platform.

She also mentioned that financial assistance would be provided to establish 50 multi-product food irradiation units in the MSME sector. Additionally, E-Commerce Export Centers will be set up in PPP mode to allow MSMEs and traditional artisans to sell their products in the global market.

Three Categories of Loan

The PM Mudra Yojana offers loans divided into three categories: Shishu Loan, Kishor Loan, and Tarun Loan. Shishu Loans provide up to ₹50,000, Kishor Loans offer from ₹50,000 to ₹5 lakh, and Tarun Loans extend up to ₹10 lakh.

Easy Loan Application Process

Under the PM Shishu Mudra Loan Scheme , no guarantor is required, and there are no charges for applying for a loan. However, interest rates may vary between banks, ranging from 9% to 12% per annum. To apply for a Mudra loan, visit your nearest bank or use the online application facility provided by many banks. For more information, visit Mudra's official website.

Eligible Beneficiaries

The PM Mudra Scheme provides loan facilities for small shopkeepers, fruit vendors, food processing units, and small industries. To avail of this scheme, you need an Aadhaar Card, PAN Card, Residential Proof, Passport Size Photo, and Business Certificate.