The Indian government has approved a five-year extension of two major entrepreneurship support programmes, Pradhan Mantri Mudra Yojana and Stand-Up India, providing continued financial assistance to small businesses, women entrepreneurs and individuals from Scheduled Caste and Scheduled Tribe communities.
The decision is expected to improve access to institutional finance and encourage more people to establish their own businesses.
₹5,000 Crore Fund Approved for Mudra Scheme
The Union Cabinet has approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) until March 31, 2031, with a corpus of ₹5,000 crore.
The fund is expected to facilitate approximately ₹12.6 lakh crore in loans under the Pradhan Mantri Mudra Yojana over the next five years.
The scheme supports eligible micro-businesses through loans of up to ₹20 lakh. The government has also reduced the annual guarantee fee from 1% to 0.75%, helping lower the cost of credit guarantees for lending institutions.
Stand-Up India Scheme to Support 2.5 Lakh More Entrepreneurs
The government has also extended the Stand-Up India Scheme until March 2031, with a target of supporting at least 2.5 lakh additional entrepreneurs.
Under the scheme, eligible women and SC/ST entrepreneurs can obtain loans ranging from above ₹10 lakh to ₹1 crore for establishing new businesses.
The financial assistance covers manufacturing, services, trading and agriculture-related activities. Eligible projects can receive loans covering up to 85% of their total project cost.
₹4,111 Crore Corpus for Credit Guarantee Support
A separate credit guarantee corpus of ₹4,111 crore has been approved for the Stand-Up India programme.
The guarantee mechanism is designed to encourage banks and other lending institutions to provide financial support to eligible entrepreneurs. It will cover 85% of the loan amount, subject to scheme conditions.
What This Means for Small Business Owners
The extension of these programmes is expected to strengthen India’s small-business ecosystem by improving access to formal banking services and encouraging entrepreneurship.
People planning to establish manufacturing units, service businesses, trading ventures or agriculture-related enterprises may benefit from the continued availability of these schemes, subject to eligibility and bank approval.
