The expansion of MUDRA loans for homestays has opened a significant opportunity for small businesses in the tourism sector, with potential loans amounting to INR 1,500 crore under the Shishu category, according to a recent report by the State Bank of India (SBI).

The report highlighted that the demand for homestays has risen sharply due to an increasing influx of tourists, with an estimated requirement of around 3 million homestays across the country. The extension of MUDRA loans is expected to support this growing sector by providing financial assistance to small entrepreneurs, helping them establish and expand their homestay businesses.

It said "With the extension of MUDRA loans for Homestays, an opportunity of approximately INR 1,500 crores of loans under the Shishu category has been created".

Under the Pradhan Mantri MUDRA Yojana (PMMY), small entrepreneurs can avail loans under three categories--Shishu (up to INR 50,000), Kishore (INR 50,001 to INR 5 lakh), and Tarun (INR 5 lakh to INR 10 lakh).

Currently, the initiative MUDRA loans for Homestays focuses on the Shishu category, with an estimated INR 1,500 crore in loan opportunities. However, the report also noted that if extended to the Kishore category, the potential loan disbursal could reach approximately INR 8,250 crore.

Loans up to INR 10 lakh being provided to businesses such as shops, dhabas, guest houses, and homestays without any guarantee, said Prime Minister Narendra Modi. "38 crore Mudra loans have been given across the country so far. About 8 crore youths have become entrepreneurs for the first time," he added while addressing the Uttarakhand Rozgar Mela via video-conferencing.

The government's initiative aims to boost the local hospitality sector by fostering entrepreneurship in tourism-related businesses. This will not only enhance the availability of accommodations but also contribute to economic growth by generating employment in rural and semi-urban areas.

The Union Budget has also outlined various measures to promote employment-driven growth, including comprehensive skill development programs for youth. Specialized training at Institutes of Hospitality Management will equip individuals with the necessary expertise to manage and operate homestays efficiently.

Furthermore, the government is focusing on improving accessibility to major tourist destinations by enhancing transport connectivity.

These initiatives are expected to strengthen India's tourism infrastructure, providing better facilities for travellers while empowering local communities through increased economic opportunities.

The expansion of MUDRA loans for homestays marks a crucial step toward making India a more tourist-friendly destination while supporting small businesses and job creation.