Fin Min doubles credit limit under Pradhan Mantri Mudra Yojana to Rs 20 lakh

Overdraft loan amount of Rs 10,000/- sanctioned under PMJDY accounts shall also be eligible to be covered under Credit guarantee Fund

The finance ministry has doubled the limit for loan under the Pradhan Mantri Mudra Yojana (PMMY) to Rs 20 lakh with immediate effect.

Announced in the Union Budget 2024-25 by Finance Minister Nirmala Sitharaman on July 23, this aims to bolster emerging entrepreneurs by providing increased funding options to them.

A new loan category, Tarun Plus, now covers loans above Rs 10 lakh up to Rs 20 lakh, available specifically to entrepreneurs who have previously borrowed and successfully repaid loans under the 'Tarun' category. Additionally, loans up to Rs 20 lakh will be backed by the Credit Guarantee Fund for Micro Units (CGFMU), reinforcing the government's commitment to fostering a strong entrepreneurial ecosystem.

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"The fund shall cover micro loans up to the specified limit (Rs 20 lakh) extended by a lending
institution to an eligible borrower, provided that the lending institution applies for guarantee cover in respect
of such loans so sanctioned within such time period and as per procedures prescribed by the fund for the
purpose. Further, overdraft loan amount of Rs 10,000 sanctioned under PMJDY accounts shall also be
eligible to be covered under the credit guarantee fund," read a section from the notification by the Department of Financial Services.