Union Government Doubles Mudra Loan Limit to Rs 20 Lakh for Repaid Borrowers

The Union government announced a major policy shift in the Union Budget 2024-25, doubling the Mudra loan limit from Rs 10 lakh to Rs 20 lakh for borrowers who have successfully repaid previous loans. The initiative aims to encourage diligent borrowers and support small entrepreneurs.

In a significant policy shift announced in the Union Budget 2024-25, the Union government has doubled the Mudra loan limit for good borrowers, raising it from Rs 10 lakh to Rs 20 lakh. Vivek Joshi, Secretary to the Department of Financial Services, Ministry of Finance, elaborated on the move, saying that it aims to incentivize and reward successful repayment of earlier loans.

The enhanced loan limit is applicable only to entrepreneurs who have availed and successfully repaid loans under the 'Tarun' category of the Mudra Yojana. 'If you closely study this announcement, the eligibility for getting Rs 20 lakh is only if you have repaid the earlier Rs 10 lakh,' Joshi told ANI. He emphasized that the extension caters specifically to borrowers who have utilized their initial loans effectively and demonstrated repayment capability.

The Pradhan Mantri MUDRA Yojana (PMMY), launched by Prime Minister Narendra Modi on April 8, 2015, aims to facilitate collateral-free micro credit of up to Rs 10 lakh to non-corporate, non-farm small and micro entrepreneurs. On the occasion of the 77th Independence Day, Prime Minister Modi highlighted the transformative impact of the MUDRA Yojana, celebrating its success in converting nearly 10 crore citizens into entrepreneurs and job creators, and generating employment through eight crore new businesses.