Prime minister Narendra Modi has launched PMMY Scheme to encourage more self-employment to be developed through the aid of Mudra loan offered by banks.

1. Mudra Loan Eligibility
Mudra loan aims to provide financial support to micro small medium
enterprises (MSMEs) sector and empower them. Unlike business loans,
mudra loans do not ask for collateral or security to get loans as it’s an
unsecured loan.
The loans under Pradhan Mantri mudra yojana scheme can be availed
by individual, SMEs, MSMEs, business owner, first-time entrepreneurs
and other business entities.

2. • However, under PMMY the borrowers have been categorized into
three different categories: the starters, the mid-level finance seeker
and the advance level growth seekers. These categories are named
Shishu, Kishor and Tarun.

3. Mudra Loan Types:-
Shishu Loan: Under Shishu loan, new entrepreneurs who are looking
for startup their business can avail a loan up to Rs.50 thousand.
Kishor Loan: Borrowers with a Rs.50 thousand to Rs.5 lakh requirement
can be fulfilled under Kishor loan. Those who have already started their
business or have been running their business for some time require
funds for further expansion.
Tarun Loan: Cater to business owners requiring funds up to Rs.10 lakh
are most likely suitable for those who want to carry out a major
expansion in their business.

4. Mudra Loan Eligibility Criteria
• The mudra loan as already stated above is meant for small business
owners. The following are the requirements that need to be met by
borrowers:
• The loan amount obtained cannot be used for educational purposes
nor purchasing a property or anything else apart from investing in
business.
• However, you can get a mudra loan to purchase a vehicle to be used
in your business.
• Businesses with high turnover are not eligible for the mudra loan
scheme.