Pradhan Mantri Mudra Yojana

Small businesses often struggle to get a loan at all, let alone at a size that suits them. Pradhan Mantri Mudra Yojana, or PMMY, is the government scheme built to fix that.

The workbook's own description: it is a government scheme that offers business loans to proprietors or entrepreneurs of small and medium enterprises. It is not aimed at large corporations, but at the non-corporate small business segment — proprietorships, partnership firms, small manufacturing units, shopkeepers, and similar small operators.

Within PMMY, the workbook names three loan tiers, distinguished by the amount of loan availed: SHISHU, KISHOR and TARUN.

PMMY loans are organised into three named tiers, depending upon the amount of loan availed — the workbook names them but does not attach specific rupee ranges to each tier in this booklet.

Eligibility is defined by business type rather than by a numeric threshold: the borrowers must come from the non-corporate small business segment, which the workbook lists as including proprietorships, partnership firms, small manufacturing units, service sector units, shopkeepers, fruit or vegetable vendors, truck operators, food service units, repair shops, machine operators, small industries, food processors, and other rural and urban industries.

The key documents the workbook names for availing such loans are proof of identity, a quotation of items purchased, and category certificates — no collateral requirement is stated for PMMY in this booklet.

Kavita runs a small tailoring business from her home and needs Rs 40,000 to buy a second sewing machine. As a proprietor of a small manufacturing unit, she qualifies under PMMY's non-corporate small business segment and applies for a loan in the tier suited to that amount — the workbook names the tiers as SHISHU, KISHOR and TARUN, sized by the loan amount, without stating the exact rupee bands for each.

She submits proof of identity, a quotation for the sewing machine, and the relevant category certificate — the documents the workbook lists for this scheme.

A larger unit needing a much bigger loan to expand production would apply under a different PMMY tier, sized to that larger amount, rather than through SHISHU.

Chapter 9 (Government Schemes for Various Savings and Investment Options), under Borrowing related schemes of Government of India, describes PMMY and its three tiers. Expect a question naming SHISHU, KISHOR and TARUN as the three PMMY tiers, and one testing which businesses qualify under the non-corporate small business segment.

• The three tiers — SHISHU, KISHOR, TARUN — are distinguished by the loan amount, not by the type of business or the state of operation.
• PMMY is for the non-corporate small business segment — proprietorships, partnerships, small units and similar — not for large corporates.
• The workbook gives no specific rupee range for each tier, and no collateral requirement, in this booklet — do not assume either from outside sources when answering from this workbook.