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Pradhan Mantri MUDRA Yojana completes 10 Years

Last updated on April 8th, 2025 Posted on April 8, 2025 by NEXT IAS Current Affairs Team  576

Syllabus: GS3/ Economy

In News

  • 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: ₹32.61 lakh crore
decade of pradhan mantri mudra yojana

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.
challenges faced by microenterprises

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.

Significance

Women Empowerment1. 68% of beneficiaries are women
2. Per woman disbursement CAGR: 13%
3. Enhanced economic independence and labour force participation
Marginalised Communities1. 50% of Mudra accounts are SC/ST/OBCs
2. 11% Mudra accounts belong to minority communities
3. Bridges financial exclusion and promotes inclusive growth
Boost to MSME Credit1. MSME credit rose from ₹8.51 lakh crore (FY14) to ₹27.25 lakh crore (FY24)
2. Projected to cross ₹30 lakh crore in FY25
3. MSME share in total bank credit increased from 15.8% to ~20%
Job Creation1. Supports self-employment and entrepreneurship
2. Generates jobs in tier-2/3 cities and rural areas

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. 

Source: PIB

 
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