---
title: "Pradhan Mantri MUDRA Yojana (PMMY) Explained"
description: "Pradhan Mantri MUDRA Yojana offers collateral-free loans up to ₹20 lakh to support micro and small enterprises, crucial for India's economic growth."
url: "https://modeldiplomat.com/learn/glossary/pradhan-mantri-mudra-yojana"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- Pradhan Mantri MUDRA Yojana is an Indian government scheme launched in 2015 that provides collateral-free institutional loans up to ₹20 lakh to non-corporate, non-farm micro and small enterprises.
- What are the three loan categories under PMMY and their limits?
- How is PMMY different from Stand-Up India?
- Does MUDRA lend money directly to entrepreneurs?
- What secures a MUDRA loan if no collateral is required?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

Pradhan Mantri MUDRA Yojana is an Indian government scheme launched in 2015 that provides collateral-free institutional loans up to ₹20 lakh to non-corporate, non-farm micro and small enterprises.

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On 8 April 2015, Prime Minister Narendra Modi launched the Pradhan Mantri MUDRA Yojana in New Delhi, with the State Bank of India among the first lenders to begin disbursing collateral-free Shishu-category loans.

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