Pillar: Economic Participation
This is not one institution -- it is a function distributed across every bank branch in the district. When a young person wants to start a small business, the Indian banking system has multiple government-backed schemes that make capital available, especially to first-generation entrepreneurs, Scheduled Caste (SC) / Scheduled Tribe (ST) communities, and women. The three key schemes are Pradhan Mantri MUDRA Yojana (PMMY — Micro Units Development & Refinance Agency), the Prime Minister's Employment Generation Programme (PMEGP), and Stand-Up India. At the district level, the Lead District Manager (LDM) coordinates all banks on financial inclusion targets. The District Consultative Committee (DCC) reviews credit flow.
If you want to start a business and need a loan, you do not need collateral for smaller amounts. MUDRA Shishu loans up to Rs 50,000 are collateral-free with no guarantor requirement. PMEGP gives you a 15-35% subsidy on your project cost. These are available at any bank branch.
- MUDRA loans in four categories — Shishu (up to Rs 50,000), Kishore (Rs 50,000–Rs 5 lakh), Tarun (Rs 5–10 lakh), Tarun Plus (Rs 10–20 lakh, for borrowers who have successfully repaid a Tarun loan); all four categories are collateral-free; available through scheduled commercial banks, RRBs, SFBs, NBFCs, and MFIs - PMEGP loans for new enterprises: up to Rs 50 lakh (manufacturing) / Rs 20 lakh (services) with 15-35% margin money subsidy; eligibility: age 18+, Class 8 pass for larger projects - The RBI Master Direction on Micro, Small and Medium Enterprise (MSME) Lending bars banks from taking collateral on loans up to Rs 20 lakh to Micro and Small Enterprise (MSE) units, and extends the same Rs 20 lakh collateral-free ceiling to PMEGP units financed through KVIC - Stand-Up India (original scheme launched April 2016, ended March 2025; revamped scheme for SC/ST and women entrepreneurs announced by the Finance Minister on 16 March 2026, guideline awaited at time of writing) - PM-SVANidhi (launched 2020; restructured by Cabinet on 27 August 2025; extended to 31 March 2030) — collateral-free working capital loans to street vendors in three tranches of Rs 15,000, Rs 25,000 and Rs 50,000; vendors who have repaid the second loan become eligible for a UPI-linked RuPay credit card (limit per the operative MoHUA scheme guideline) - CGTMSE: credit guarantee that compensates banks for defaults on collateral-free MSE loans, covering fund and non-fund credit facilities up to Rs 10 crore per borrower (typical risk-cover up to 75% of default); the complementary RBI rule barring collateral on MSE loans up to Rs 20 lakh is what creates the need for this guarantee
Portal: mudra.org.in for MUDRA scheme guidelines; kviconline.gov.in for PMEGP application tracking Also: Visit any public sector bank branch and ask about MUDRA loans; visit the DIC for PMEGP applications; find the LDM by searching "[your district] Lead District Manager"
For what this looks like in a particular district, start from the district courses or the English reference guide (Hindi).