Pradhan Mantri MUDRA Yojana completes 10 Years

General Studies Paper -3

Context: On 8 April 2025, India marked 10 years of the Pradhan Mantri MUDRA Yojana (PMMY).

About the Scheme

• Launched: April 2015
• Objective: To provide collateral-free institutional credit to non-corporate, non-farm micro and small enterprises.
• Tagline: Funding the Unfunded
• Implementation: Through MUDRA (Micro Units Development and Refinance Agency).
• Target: Small businesses in manufacturing, trading, processing, and services—a major employment segment after agriculture.
• Collateral-free credit up to ₹20 lakh is provided by Member Lending Institutions (MLIs) i.e. Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).
• Loan Categories under PMMY:
• Achievements (As of FY25)
• Loans sanctioned: Over 52 crore
• Loan value: ₹61 lakh crore

Need For Funding the Unfunded (MSME)

• Micro enterprises constitute a major economic segment in India and provide large employment after agriculture. This segment includes micro units engaged in manufacturing, processing, trading and services sector.
• It provides employment to nearly 10 crore people. Many of these units are proprietary/ single ownership or Own Account enterprises and many a time referred to as the Non-Corporate Small Business sector.

International Recognition

• IMF has praised PMMY across multiple reports:
• 2017: Helped women-led businesses access credit.
• 2019: Recognized its role in refinancing MSMEs.
• 2023: Highlighted over 2.8 million women-owned MSMEs.
• 2024: Acknowledged PMMY as key to formalisation and self-employment.

Challenges

• Risk of NPAs (Non-Performing Assets) in some sectors.
• Need for better credit appraisal and training of borrowers.
• Require complementary ecosystems (e.g., market access, digital literacy).

Conclusion

• In ten years, Pradhan Mantri Mudra Yojana has consistently demonstrated the power of financial inclusion and the strength of grassroots innovation.