What are Micro Units Development and Refinance Agency (MUDRA) Loans?

About MUDRA Loans:

• MUDRA Loan is offered under the Pradhan Mantri Mudra Yojana (PMMY).
• PMMY was launched in 2015 with the aim to help small-scale businesses expand and attain success. 
• Support under the scheme: It provides loans of up to 10 lacks to non-corporate, non-farm small/micro enterprises. 
• Purpose of loan: To start a new business, enhance existing or meet working capital requirements, and for business expansion purposes
• These loans are classified as MUDRA loans under PMMY. 
• Eligibility: Any Indian Citizen who has a business plan for a non-farm sector income-generating activities such as manufacturing, processing, trading, or service sector.
• These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs, and NBFCs. 
• Types of loans:
  • Shishu – Covering loans up to Rs 50,000; 
  • Kishor – Covering loans above Rs 50,000 and up to Rs 5 lakh; 
  • Tarun – Covering loans above Rs 5 lakh and up to Rs 10 lakh.

Q1) What is a joint liability group? 

Joint Liability Group (JLG) is an informal group comprising preferably of 4 to 10 individuals for the purposes of availing bank loan either individually or through the group mechanism against mutual guarantee.

Source: MUDRA loans to joint liability group micro enterprises now eligible for credit guarantee fund

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