Question

UPSC Prelims 2016 Question:

Pradhan Mantri MUDRA Yojana is aimed at

1. bringing the small entrepreneurs into formal financial system
2. providing loans to poor farmers for cultivating particular crops
3. providing pensions to old and destitute persons
4. funding the voluntary organizations involved in the promotion of skill development and employment generation

Answer (Detailed Solution Below)

Option 1: bringing the small entrepreneurs into formal financial system

Detailed Solution

Explanation:

Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched in 2015 to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them.
It enables a small borrower to borrow from all Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non-Banking Finance Companies (NBFC) for loans upto Rs 10 lakhs for non-farm income generating activities.
Under the aegis of Pradhan Mantri MUDRA Yojana, MUDRA has already created the following products/schemes.

Shishu: covering loans upto 50,000/-
Kishor: covering loans above 50,000/- and upto 5 lakh
Tarun: covering loans above 5 lakh and upto 10 lakh

Therefore, option (1) is the correct answer.

Relevance: Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime Minister on April 8, 2015.

Subject: Economics | Industry

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