Pradhan Mantri Mudra Yojana (PMMY)- Download Free PDF

The Pradhan Mantri Mudra Yojana (PMMY) is a cornerstone of India’s financial inclusion strategy, specifically designed to “Fund the Unfunded.” For the upcoming exams, this scheme is critical because it bridges the gap between banking and the informal micro-enterprise sector.

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Pradhan Mantri Mudra Yojana (PMMY): Guide for 2026 Exams

1. Launch and Nodal Agency

• Launched: April 8, 2015.
• Nodal Ministry: Ministry of Finance (Department of Financial Services).
• Implementing Body: MUDRA (Micro Units Development & Refinance Agency Ltd), which is a wholly-owned subsidiary of SIDBI.
• Objective: To provide collateral-free institutional credit to non-corporate, non-farm small and micro-enterprises.

2. The Four Pillars (Loan Categories)

The most significant update for the 2026 exam cycle is the inclusion of the Tarun Plus category, which increased the maximum loan limit from ₹10 lakh to ₹20 lakh.

Category	Loan Amount	Target Stage
Shishu	Up to ₹50,000	Early stage/Start-ups
Kishore	₹50,001 to ₹5 Lakh	Mid-stage/Expansion
Tarun	₹5 Lakh to ₹10 Lakh	Growth stage/Stabilization
Tarun Plus	₹10 Lakh to ₹20 Lakh	For successful ‘Tarun’ repayers (Added in 2024)

3. Key Features of PMMY

• Collateral-Free: No security is required to avail of these loans.
• Mudra Card: Borrowers receive a RuPay debit card for the working capital portion of the loan, allowing for flexible withdrawals.
• Interest Subvention: The government provides a 2% interest subvention for 12 months for Shishu loan borrowers who make prompt repayments.
• Guarantee Cover: Loans are covered under the Credit Guarantee Fund for Micro Units (CGFMU) managed by NCGTC.

4. Latest Performance Highlights (2025-26)

• Saturation: As of early 2026, the scheme has crossed the milestone of 50 crore+ cumulative loan sanctions since inception.
• Women Empowerment: Approximately 68-70% of the total loans under PMMY have been sanctioned to women entrepreneurs.
• Social Inclusion: Over 50% of the loans have been disbursed to SC/ST and OBC categories.

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10 Practice MCQs for the Upcoming Exams

Q1. What is the maximum loan limit under the newly introduced ‘Tarun Plus’ category of PMMY?

A) ₹10 Lakh

B) ₹15 Lakh

C) ₹20 Lakh

D) ₹25 Lakh

Answer: C) ₹20 Lakh

Q2. MUDRA Ltd. is a wholly-owned subsidiary of which financial institution?

A) RBI

B) NABARD

C) SIDBI

D) SEBI

Answer: C) SIDBI (Small Industries Development Bank of India)

Q3. To be eligible for the ‘Tarun Plus’ category, what is the primary prerequisite for an entrepreneur?

A) They must be a woman entrepreneur.

B) They must have a GST registration for 5 years.

C) They must have successfully repaid a previous ‘Tarun’ category loan.

D) They must belong to the SC/ST category.

Answer: C) They must have successfully repaid a previous ‘Tarun’ category loan.

Q4. What percentage of interest subvention is provided for prompt repayment of ‘Shishu’ loans?

A) 1%

B) 2%

C) 3%

D) 5%

Answer: B) 2%

Q5. In which year was the Pradhan Mantri Mudra Yojana launched?

A) 2014

B) 2015

C) 2016

D) 2017

Answer: B) 2015 (April 8)

Q6. Which of the following sectors is NOT covered under the Mudra Yojana?

A) Small Manufacturing Units

B) Shopkeepers and Traders

C) Corporate/Large Scale Industries

D) Allied Agricultural Activities (Poultry, Dairy, etc.)

Answer: C) Corporate/Large Scale Industries (PMMY is for non-corporate, small/micro units).

Q7. What is the tagline of MUDRA?

A) Clean Fuel, Better Life

B) Funding the Unfunded

C) Power to Empower

D) Banking for All

Answer: B) Funding the Unfunded

Q8. Which fund provides guarantee coverage for loans extended under the PMMY?

A) CGTMSE21

B) CGFMU

C) PM-SVANidhi Fund

D) RIDF

Answer: B) CGFMU (Credit Guarantee Fund for Micro Units)

Q9. What is the range of loan amounts for the ‘Kishore’ category?

A) Up to ₹50,000

B) Above ₹50,000 to ₹5 Lakh

C) ₹5 Lakh to ₹10 Lakh

D) ₹10 Lakh to ₹20 Lakh

Answer: B) Above ₹50,000 to ₹5 Lakh

Q10. The ‘Mudra Card’ issued to borrowers is powered by which payment gateway?

A) Visa

B) Mastercard

C) RuPay

D) Maestro

Answer: C) RuPay