SDG 8: Decent Work & Economic Growth | SDG 11: Sustainable Cities and Communities
Institutions: Ministry of Tourism | Ministry of Finance
The Government of India has announced MUDRA loans for homestays, expanding credit support under the Pradhan Mantri Mudra Yojana (PMMY) to cover both term loans and working capital for homestay entrepreneurs. Loans will be provided through Member Lending Institutions (MLIs) including banks, NBFCs, MFIs, and other financial intermediaries.
As per the Ministry of Tourism’s national standards, a homestay is an accommodation unit where the owner resides with family and lets out 1–6 rooms (up to 12 beds). Homestays are promoted as affordable, immersive, and sustainable stays that showcase local culture and traditions.
Under PMMY, entrepreneurs can access collateral-free loans in four categories: Shishu (up to ₹50,000), Kishor (₹50,001–₹5 lakh), Tarun (₹5–10 lakh), and Tarun Plus (₹10–20 lakh) for those with a good repayment record.
By formally integrating homestays into PMMY, the Government is linking credit access with rural tourism growth, enabling small household enterprises to scale, modernise facilities, and meet quality standards. This initiative complements the World Tourism Day 2025 theme “Tourism and Sustainable Transformation”, where the Ministry also launched the 66th Tourism Data Compendium, Project MIS, and MoUs with digital partners. Together, they signal a coordinated push to embed sustainability, technology, and grassroots livelihoods into India’s tourism strategy.
What is PMMY? → The Pradhan Mantri Mudra Yojana (2015) provides collateral-free loans to small businesses through banks, NBFCs, and MFIs to promote self-employment and micro-enterprise growth.
Relevant Question for Policy Stakeholders:
Can targeted credit lines for homestays help India diversify rural tourism beyond pilgrimage hubs and turn it into a major livelihood driver?
Follow the full guide here: Guide to MUDRA Loans for Homestays (PDF)