Pradhan Mantri Mudra Yojana (PMMY)

Purpose
MUDRA is an NBFC (non-banking financial corporation) that promotes the growth of
MSMEs. MUDRA assists banks, microfinance institutions (MFIs), and non-bank financial
companies (NBFCs) in refinancing loans to micro units with a maximum loan requirement of
10 lakhs. The loans under this programme are made available by Commercial Banks, Small
Finance Banks, MFIs, and NBFCs. In addition to approaching any of these lending institutions,
applicants have the option to submit loan applications online via the UdyamiMitra portal.

The PMMY comprises three distinct schemes, denoted as ‘Shishu,’ ‘Kishore,’ and ‘Tarun’. These
schemes represent the funding requirements of the beneficiary micro-units or entrepreneurs
and the stage of development or growth they are in. Additionally, they serve as a benchmark
for the subsequent phase of graduation or expansion.

The nature of assistance provided by “Shishu” is loans of up to Rs.50,000. “Kishor” offers loans
ranging from Rs.5 lakhs to Rs.50,000 and above. “Tarun” offers micro-units loans in excess of
Rs. 5 lakhs and up to Rs. 10 lakhs.

Target Beneficiaries
Non–Corporate Small Business Segment (NCSB) comprising of millions of proprietorship /
partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits
/ vegetable vendors, truck operators, food-service units, repair shops, machine operators, small
industries, artisans, food processors and others, in rural and urban areas.

Delivery Channel
MUDRA’s delivery channel is envisioned to be predominantly through refinancing to
Banks/NBFCs/MFIs. At the same time, there is a need to build and extend the ground-level
distribution channel. There are already a huge number of ‘Last Mile Financiers’ in the shape of
firms, trusts, organisations, associations, and other networks that provide informal funding to
small enterprises in this environment.

Prime Minister’s Employment Generation Programme (PMEGP)

The initiative is executed by the Khadi and Village Industries Commission (KVIC),
which acts as the central agency at the national level. The implementation of the initiative at
the state level involves the use of State KVIC Directorates, State Khadi and Village Industries
Boards (KVIBs), District Industries Centres (DICs), and banks. In such instances, KVIC
channels government subsidies through certain banks to ultimately distribute it directly into the
bank accounts of the beneficiaries/entrepreneurs.

Nature of assistance
Funds will be allocated in the annual Budget Estimates for the purpose of providing
Margin Money subsidy to establish new micro enterprises/units. Additionally, a sum of Rs. 100
Cr. or as approved by the competent authority will be set aside from the allocated funds for
each financial year to provide Margin Money subsidy for the improvement of existing
PMEGP/REGP/MUDRA units. The maximum cost of the project/unit admissible in
manufacturing sector is ₹ 25 lakhs and in the business/service sector, it is ₹ 10 lakhs. Categories
of Beneficiary’s Rate of subsidy under PMEGP (of project cost). Area (location of project/unit)
General category 15%(Urban), 25%(Rural), Special 25%(Urban), 35%(Rural) (including SC/
ST/ OBC/ Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border
areas, etc.). The balance amount of the total project cost will be provided by the banks in the
form of term loan and working capital.

Eligibility
Any person who is at least 18 years old. A minimum qualification of passing the eighth grade
is required for projects with a cost above Rs. 10 lakh in the industrial sector and Rs. 5 lakh in
the business/service sector. Only newly proposed projects are eligible for approval under the
Prime Minister’s Employment Generation Programme (PMEGP). Self Help Groups, including
those falling to Below Poverty Line category, providing they have not received benefits from
any other programme, as well as institutions established under the Societies Registration Act
of 1860, production co-operative societies, and charitable trusts, are also eligible. Units that
are already operating under the PMRY, REGP, or any other government scheme, as well as
units that have already received government subsidies from any other government scheme, are
ineligible.

Support for Rural Innovators Programme

The Government of Kerala has implemented the Innovation Grant programme to offer
monetary support to startups and entrepreneurs, enabling them to transform their inventive
concepts into fully established enterprises. The implementation of this initiative is carried out
by the Kerala Startup Mission, which serves as the central agency of the Government of Kerala
for activities and programmes relating to startups. Innovation awards should not serve as
monetary rewards for simply having an idea. The award aims to assist innovators in the
development of prototypes or products and the establishment of enterprises. This programme
is accessible to ideas pertaining to Grassroot Innovations and Rural Innovations.

Innovation Grant

The Government of Kerala has implemented the Innovation Grant initiative to offer monetary
support to startups and entrepreneurs, enabling them to transform their innovative concepts
into fully established enterprises. The implementation of this initiative is carried out by the
Kerala Startup Mission, which serves as the central agency of the Government of Kerala for
activities and programmes relating to startups. An innovation grant is not awarded as a
monetary incentive for just having an idea. The innovation award aims to assist inventors
and entrepreneurs in the development of prototypes or products, enabling them to expand into
fully established companies. This programme is accessible to ideas pertaining to Grassroot
Innovations and Rural Innovations.

Types of Grants

• Idea Grant – For startups in the ideation and designing stage or proof of concept stage, aiming to develop a minimum viable prototype. The maximum grant amount is Rs.3 lakhs.
• Idea Grant (Student Innovator) is available for students who are currently in the ideation and designing stage or the proof of concept stage, and are working towards the development of a minimum viable prototype. The grant amount might reach a maximum of Rs.2 lakhs.
• Productization Grant – Designed for entrepreneurs seeking to transform their Minimum Viable Prototype into the ultimate product, while demonstrating early traction or generating early income. The grant amount can reach a maximum of Rs.7 lakhs.
• The Women/Transgender Productization Grant is designed for women/transgender companies seeking to transform their Minimum Viable Prototype into the final product. This award will serve as a supplementary funding to the current productization grant. The grant amount can reach a maximum of Rs.12 lakhs.
• The Market Acceleration Grant is designed for businesses seeking to expedite their revenue growth. The maximum grant amount available is Rs.10 lakhs.
• Expansion Grant – Designed for entrepreneurs seeking to expand their operations and optimise their income generation. The grant amount might go as high as Rs. 15 lakhs.

Research & Development Grant

This funding is specifically allocated to hardware firms that have a substantial
research and development component. Each startup will get a maximum of INR 30 Lakh, and
suggestions for candidates will be provided during the quarterly assessments. To be eligible
for the funding, companies must possess a functional prototype of their product and be
affiliated with at least one authorised incubator inside the state. Prospective candidates are
required to provide a concise and well-defined business proposal outlining their intended
allocation of funds. A minimum of 50% of the grant must be allocated towards hardware
expenses, while marketing expenditures should not exceed 20%. R&D funds are not eligible
for funding personnel or hiring expenses. Startups who have obtained patents or are in the
process of expanding their product are prioritised.

Technology Transfer & Commercialization Support Scheme

The Kerala Government, in collaboration with the Kerala Startup Mission, has introduced the
Technology Transfer initiative. This initiative is aimed at supporting companies that have
acquired or obtained a Technology Licence from any Government research Institution in India
and are now working on developing it into a marketable product. This programme aims to assist
Technology License/Transfer companies by offering a maximum financing support of Rs.10
Lakhs in the form of reimbursement for the expenses incurred by the companies in paying the
Research Institution. Nevertheless, the assistance is restricted to covering only 90% of the
technology charge that is owed to the Research organisation.

The stipulations and prerequisites for the advantages provided by the plan will be as follows:

• The ownership of the license/technology acquired through this programme must belong to the Startup, or as stipulated by the research agency’s rules.
• Kerala Startup Mission will get a 2% royalty for the commercialised product, up to the amount provided by the Kerala Startup Mission via the plan.
• The Startup is required to get the product, for which the license/technology is acquired, into commercial use within a timeframe of 2 years.
• If the firm fails to commercialise the product within two years, it would be obligated to reimburse the contribution provided by the Kerala firm Mission.
• Prior to accessing the benefit, the Startup will enter into an agreement with the Kerala Startup Mission.

Eligibility
To be eligible, the startup must be a registered company in Kerala as either an LLP or Pvt. Ltd
company. Additionally, the startup must have an active registration with KSUM at the time of
application. Furthermore, the startup company must have DIPP registration and a status of
‘Active’ or ‘Active Compliant’ with MCA. It is important that the startup does not have any
outstanding dues with any Government agencies, KSUM, or other incubators in the state.
Additionally, the startup must not be blacklisted by any Government agency in India.