Millions of people in India dream of starting their own business or expanding their existing one. However, lack of funds often becomes the biggest hurdle. Most banks and financial institutions ask for collateral before approving a loan. To solve this issue and support self-employment, the Government of India has introduced several schemes that offer collateral-free loans. These initiatives aim to empower small business owners, street vendors, and traditional artisans to become self-reliant.
Here are three major government schemes that offer loans without the need for a guarantor or collateral:
1. Pradhan Mantri MUDRA Yojana (PMMY)
Ideal for individuals wanting to start or grow a small business, this scheme offers loans under three categories:
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Shishu Loan – up to ₹50,000
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Kishore Loan – ₹50,000 to ₹5 lakhs
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Tarun Loan – ₹5 lakhs to ₹10 lakhs
Now, a new category ‘Tarun Plus’ has been added, which allows loans up to ₹20 lakhs without collateral—provided the previous loan was repaid on time. So far, over ₹33 lakh crore has been disbursed under PMMY. Apply online at udyamimitra.in.
2. Pradhan Mantri SVANidhi Yojana
Launched during the COVID-19 pandemic, this scheme supports street vendors like vegetable sellers, hawkers, and cart vendors. The loan is disbursed in three phases:
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₹10,000 in the first phase
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₹20,000 in the second phase (after timely repayment)
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₹50,000 in the third phase
The scheme also offers benefits like interest subsidies and incentives for digital transactions.
3. Pradhan Mantri Vishwakarma Yojana
This scheme is designed for traditional artisans such as carpenters, goldsmiths, blacksmiths, cobblers, masons, and others from 18 specified categories. It offers:
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₹1 lakh loan in the first phase
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₹2 lakh loan in the second phase
No collateral is required, and beneficiaries also receive training, toolkits, and subsidies. The scheme aims to promote the spirit of “Vocal for Local”.
Source: Krishi Jagran
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