{"id":1025,"date":"2023-04-10T00:00:00","date_gmt":"2023-04-10T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/10-04-2023\/8th-anniversary-of-pradhan-mantri-mudra-yojana-pmmy\/"},"modified":"2023-04-10T00:00:00","modified_gmt":"2023-04-10T00:00:00","slug":"8th-anniversary-of-pradhan-mantri-mudra-yojana-pmmy","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/10-04-2023\/8th-anniversary-of-pradhan-mantri-mudra-yojana-pmmy","title":{"rendered":"8th Anniversary of Pradhan Mantri MUDRA Yojana (PMMY)"},"content":{"rendered":"<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The Prime Ministerhas lauded <\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Mudra Yojana<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> on<\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> completion of 8 years.\u00a0<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>PM MudraYojana<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> has played a vital role in funding the unfunded and ensuring a life of dignity as well as prosperity for countless Indians.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Pradhan Mantri MUDRA Yojana (PMMY)<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>About:\u00a0<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The Pradhan Mantri MUDRA Yojana (PMMY) was launched on <\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>8th April 2015.<\/strong><\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Any Indian Citizen<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> who has a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than Rs. 10 lakh can approach either a Bank, MFI, or NBFC for availing of Micro Units Development &#038; Refinance Agency Ltd. (MUDRA) loans under Pradhan Mantri Mudra Yojana (PMMY).<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Aim:\u00a0<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">To facilitate easy collateral-free micro credit of up to Rs10 lakh to non-corporate, non-farm small and micro entrepreneurs for income generating activities.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Features:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The loans under PMMY are provided by Member Lending Institutions (MLIs), i.e., Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The loans have been divided into three categories based on the need for finance and stage in maturity of the business.\u00a0 These are <\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Shishu<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> (loans up to Rs 50,000\/-), <\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Kishore<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> (loans above Rs 50,000\/- and up to Rs 5 lakh), and <\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Tarun <\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">(loans above Rs. 5 lakh and up to Rs. 10 lakh).\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The rate of interest is decided by lending institutions in terms of RBI guidelines.\u00a0 In the case of a working capital facility, interest is charged only on money held overnight by the borrower.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Interest Subvention of 2% on prompt repayment of Shishu loans extended under PMMY for a period of 12 months to all eligible borrowers\u2019.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Credit Guarantee Fund for Micro Units (CGFMU):<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Credit Guarantee Fund for Micro Units was set up in January 2016 under the aegis of the<\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> National Credit Guarantee Trustee Company Ltd. (NCGTC)<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">, a wholly-owned company of Government of India, to provide guarantee to:<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Loans extended to eligible micro units <\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>under Pradhan Mantri Mudra Yojana (PMMY) <\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">up to Rs. 10 lakh, by Banks\/ Non-Banking Financial Companies (NBFCs)\/ Micro Finance Institutions (MFIs)\/ other financial intermediaries;<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Overdraft loan amount of Rs. 5,000<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> (enhanced to Rs 10,000 in Sep, 2018) sanctioned under Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts; and<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Self Help Group (SHG) portfolio<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> between R10 lakh to Rs. 20 lakh (w.e.f. 01.04.2020).<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Three pillars of the scheme:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Banking the Unbanked<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Securing the Unsecured<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Funding the Unfunded<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Significance\u00a0<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The scheme has enabled easy and hassle-free access to credit to micro-enterprises and has helped a large number of young entrepreneurs establish their businesses.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The PMMY scheme has helped in the generation of large-scale employment opportunities at the grassroots level and also has proved to be a game changer while boosting the Indian economy.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The growth of MSMEs has contributed massively to the \u201cMake in India\u201d programme as strong domestic MSMEs lead to increased indigenous production both for domestic markets as well as for exports.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Achievements under Pradhan Mantri Mudra Yojana (PMMY) as on 24.03.2023<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">About Rs. 23.2 lakh crore has been sanctioned in 40.82 crore loan accounts.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">About 68% of accounts under the scheme belong to women entrepreneurs and 51% of accounts belong to entrepreneurs of SC\/ST and OBC categories.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">This demonstrates that easy availability of credit to the budding entrepreneurs of the country has led to innovation and sustained increase in per capita income.\u201d<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Challenges faced by the Scheme<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Rise in non-performing assets or bad loans<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Lack of financial literacy among beneficiaries leading to defaults<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">There have also been increasing instances of frauds reported at public sector banks.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Less outreach to rural entrepreneurs<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Loan amount of up to Rs. 10 lakhs, is inadequate for many small enterprises.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Shoddy appraisal systems and end-use monitoring practices at PSBs appear to be one of the key reasons for the quick deterioration in the quality of loans.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Conclusion<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Overall, MUDRA is a step in the right direction for funding the unfunded, although the government shall set up a powerful monitoring and grievance remedy mechanism for the problems arrived under the scheme.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Source: <\/span><\/span><\/span><\/span><a href=\"https:\/\/pib.gov.in\/PressReleasePage.aspx?PRID=1914739\" style=\"text-decoration:none\" target=\"_blank\" rel=\"noopener\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#1155cc\"><span style=\"background-color:#ffffff\"><u>PIB<\/u><\/span><\/span><\/span><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News The Prime Ministerhas lauded Mudra Yojana on completion of 8 years.\u00a0 PM MudraYojana has played a vital role in funding the unfunded and ensuring a life of dignity as well as prosperity for countless Indians.\u00a0 Pradhan Mantri MUDRA Yojana (PMMY) About:\u00a0 The Pradhan Mantri MUDRA Yojana (PMMY) was launched on 8th April 2015. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1026,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[31,62,30,26,46,55],"class_list":["post-1025","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-government-policies-interventions","tag-growth-development","tag-gs-2","tag-gs-3","tag-indian-economy-related-issues","tag-welfare-schemes-for-vulnerable-sections-of-population-their-performance"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/3666767Screenshot_6.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=1025"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1025\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/1026"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=1025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=1025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=1025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}