Budget 2024: Mudra Yojana Loan Limit Doubled to Rs 20 Lakh for Small Entrepreneurs

Union Finance Minister Nirmala Sitharaman is presenting the first budget of the newly elected government today, following the recent Lok Sabha elections that saw the government reformed at the center. In this budget, the government has increased the loan limit under the Mudra Yojana from Rs 10 lakh to Rs 20 lakh, providing significant relief to small entrepreneurs. This doubling of the loan limit will directly assist entrepreneurs who are striving to establish their businesses.

The central government has introduced a special loan arrangement to support economically disadvantaged individuals in starting their own enterprises. Under this scheme, loans of up to Rs 10 lakh are offered without any collateral to those engaged in small businesses, such as street vendors selling fruits and vegetables. Prior to the Lok Sabha elections, the BJP had promised to raise this loan limit to Rs 20 lakh. Today, the finance minister fulfilled this promise by announcing the increased loan limit.

What is Mudra Yojana?

The government launched the Mudra Yojana in 2015 to assist the middle class in India in starting their own businesses. Under this scheme, individuals can obtain loans of up to Rs 10 lakh without the need for collateral. So far, countless individuals have started businesses by taking advantage of loans provided under this initiative.

Loans under the Mudra Yojana are categorized into three segments: infant, adolescent, and youth. Previously, loans of up to Rs 50,000 were available in the first category, while the second category offered loans ranging from Rs 50,000 to Rs 5 lakh. The third category provided loans from Rs 5 lakh to Rs 10 lakh, which will now see an increase. No collateral is required for these loans; applicants simply need to specify the business they intend to pursue in their loan application.

Individuals can access this scheme by visiting any bank. Different banks offer loans at varying interest rates, typically ranging from 10% to 12%. All documents submitted with the application are scrutinized by the bank, and if everything is in order, a Mudra Card is issued. This card functions like a debit card, allowing entrepreneurs to make payments as needed for their businesses.