The Finance Ministry has increased the Mudra loan limit to Rs 20 lakh from the current Rs 10 lakh, following the announcement made in the Budget this year on doubling the loan limit by Finance Minister Nirmala Sitharaman. In a notification on Thursday, the ministry said it has added a new category Tarun Plus for loans above Rs 10 lakh and up to Rs 20 lakh for entrepreneurs who have repaid their loans under the Tarun category.
The scheme currently enables credit under three categories: ‘ Shishu’ for loans up to Rs 50,000, ‘Kishore’ for loans up to Rs 5 lakh and ‘Tarun’ for credit up to Rs 10 lakh. Interest on Mudra loans by PSBs and private banks ranges from 9.15 per cent -12.80 per cent and 6.96 per cent –28 per cent, respectively based on the cost of funds, risk profile of the borrower, tenure of loans, etc.
Mudra loans including the new Tarun Plus category are provided under the Credit Guarantee Fund for Micro Units (CGFMU).
“The schematic interventions of MUDRA Ltd. have been named ‘Shishu’, ‘Kishor’ ‘Tarun’ and ‘Tarun Plus’ to signify the stage of growth/development and funding needs of the beneficiary micro unit entrepreneur and also provide a reference point for the next phase of graduation/growth,” the notification read.
The scheme was launched in 2015 by Prime Minister Narendra Modi to provide small-ticket loans to micro and small enterprises by commercial banks, regional rural banks, small finance banks, non-banking financial companies, and microfinance institutions.
The notice further said that the overdraft facility of Rs 10,000 sanctioned under the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts would be eligible to be covered under the Credit Guarantee Fund.
As of October 18 in the current fiscal, 2.29 crore Mudra loans involving Rs 2.20 lakh crore were sanctioned, of which Rs 2.14 lakh crore loans were disbursed. In FY23, 6.67 crore loans involving Rs 5.4 lakh crore were sanctioned and Rs 5.32 lakh crore loans were disbursed.