The Pradhan Mantri Mudra Yojana (PMMY) — one of India’s most popular government credit schemes — has been expanded to help aspiring entrepreneurs even more by raising the maximum loan amount from ₹10 lakh to ₹20 lakh. This change opens up bigger opportunities for small and micro business owners to start, grow, or scale their operations without pledging any property or security.

💡 What Is Mudra Yojana?

Launched in 2015, PM Mudra Yojana provides collateral‑free loans to micro, small, and non‑corporate businesses that struggle to get traditional bank credit. The idea is to “fund the unfunded” — giving capital support to entrepreneurs who don’t have access to formal financing.

Under the scheme, loans are given through banks, NBFCs, microfinance institutions, and other lending partners, helping millions of borrowers nationwide.

💰 New Loan Limit — Up to ₹20 Lakh!

In the 2024‑25 Union Budget, the Finance minister announced that the maximum loan limit under PM Mudra Yojana would be doubled from ₹10 lakh to ₹20 lakh — and this enhancement has now been implemented.

🆕 Tarun Plus Category

To make this happen, a new loan category called Tarun Plus was introduced:

• Shishu: Up to ₹50,000
• Kishore: ₹50,001 – ₹5,00,000
• Tarun: ₹5,00,001 – ₹10,00,000
• Tarun Plus: ₹10,00,001 – ₹20,00,000
  The Tarun Plus category allows borrowers to access loans up to ₹20 lakh — much higher than earlier — without collateral.

📌 Who Can Get ₹20 Lakh Loan?

You can qualify for extended loans up to ₹20 lakh if you meet certain conditions:
✔ The business should be non‑corporate (sole proprietorship, partnership, etc.).
✔ The activity must be non‑agriculture and income‑generating.
✔ For Tarun Plus loans (above ₹10 lakh), previous repayment history matters: the applicant should have successfully repaid earlier Mudra loans — especially under the Tarun category — before accessing the higher limit.

This means: you often must show a good track record of repayment before accessing the highest loan tier.

🏦 Benefits of This New Limit

🚀 1. Bigger business Growth

Loans up to ₹20 lakh help you:

• Buy better equipment or machinery
• Expand your shop or service centre
• Increase inventory or raw materials
• Invest in marketing or technology
• Hire staff or enter new markets
  without pledging property.

💸 2. Collateral‑Free Credit

Like earlier Mudra loans, even amounts up to ₹20 lakh are provided without security or guarantee — making credit accessible for those without assets.

📈 3. Supports Formal Credit History

Taking a Mudra loan and repaying it builds your credit reputation, helping you access other formal loans in future.

📝 How to Apply for PM Mudra Loan (Including ₹20 Lakh)

Here’s how you can get started:

1. Prepare Your Documents

Usually you need:

• Aadhaar card
• PAN card
• Address proof
• Business plan/project report
• Bank account details
• Basic KYC documents
  This varies slightly by lender.

2. Choose Your Lending Partner

PM Mudra loans are provided through:

• Public sector banks
• Private banks
• NBFCs
• Microfinance institutions
  You can ask at your local bank branch or apply online (e.g., via govt portals like Jan Samarth).

3. Submit Your Application

Visit the bank or apply online with your documents and business plan. The bank will evaluate your eligibility and repayment capacity.

4. Loan Sanction and Disbursement

If approved, your loan amount will be transferred to your bank account without requiring collateral.

📊 Points to Keep in Mind

🔹 Interest rates depend on the lending institution and loan category — usually competitive but varying by bank.
🔹 Not all borrowers automatically qualify for ₹20 lakh — you may need to demonstrate good repayment history on earlier Mudra loans.
🔹 Loans must be for income‑generating activities — not for personal purposes.
🔹 Avoid middlemen or agents charging fees — official channels shouldn’t ask for advance fees.

🌟 Why This Update Matters in 2026

The upgrade to ₹20 lakh loan limit significantly enhances the Mudra scheme’s impact by enabling entrepreneurs to move beyond micro‑level activities to small business scaling and expansion, helping boost self‑employment, job creation, and economic growth across India.

The government is also considering extending the Mudra Yojana beyond 2026, reinforcing long‑term support for entrepreneurs.

📌 Summary

• PM Mudra Yojana now allows loans up to ₹20 lakh under Tarun Plus — double the earlier ₹10 lakh limit.
• Loans are collateral‑free, accessible through banks and NBFCs.
• Higher loans may require successful repayment history of earlier Mudra loans.
• This improvement helps expand businesses, create jobs, and build stronger entrepreneurial growth.

 

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