Ministry of Finance is committed to providing financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes. The financial needs of all stakeholders ranging from budding entrepreneurs to hard-working farmers have also been catered to through various initiatives. A key initiative towards this is Pradhan Mantri MUDRA Yojana (PMMY), which has given wings to the dreams and aspirations of millions, along with a feeling of self-worth and independence.

PMMY was launched by the Hon’ble Prime Minister on April 8, 2015, for providing loans up to Rs.10 Lakh to the non-corporate, non-farm small/micro-enterprises. As we are celebrating the sixth anniversary of PMMY, we take look at the major aspects of this Scheme and its achievements so far.

Why MUDRA Yojana?

India is a young country brimming with youthful enthusiasm and aspirations. In order to provide a fertile ground for sowing the seeds of India’s development, it is very important to harness this innovative zeal of young India which can provide new-age solutions to existing gaps in the economic ecosystem of the country. Understanding the need to harness the latent potential of entrepreneurship in India, the NDA Government in the very first budget launched the Pradhan Mantri MUDRA Yojana.

How does MUDRA Yojana work?

Under PMMY collateral-free loans of up to Rs. 10 Lakh are extended by Member Lending Institutions (MLIs) viz Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), etc.

The loans are given for income-generating activities in the manufacturing, trading, and services sectors and for activities allied to agriculture.

Mudra loans are offered in three categories namely, ‘Shishu’, ‘Kishore’and ‘Tarun’ which signifies the stage of growth or development and funding needs of the borrowers:-

Shishu: covering loans up to Rs. 50,000/-
Kishore: covering loans above Rs. 50,000/- and up to Rs. 5 lakh
Tarun: covering loans above Rs. 5 lakh and up to Rs. 10 lakh
With an objective to promote entrepreneurship among the new generation aspiring youth, it is ensured that more focus is given to Shishu Category loans and then Kishore and Tarun categories.

Achievements of this Scheme (As on 19.03.2021)

More than 28.68 crore loans for an amount of Rs 14.96 lakh crore have been sanctioned since launch of the scheme (as on 19.03.2021)

4.20 crore PMMY loans sanctioned in 2020-21 and Rs. 2.66 lakh Crore sanctioned in FY 2020-21 (As on 19.03.2021)

The average ticket size of the loans is about Rs 52,000/-

88% of the loans are in the ‘SHISHU’ category

Almost 24% of the loans have been given to New entrepreneurs

About 68% of the loans have been given to women entrepreneurs

About 51% of the loans loan have been given to SC/ST/OBC borrowers.

SCs and STs constitute 22.53 % of the borrowers

OBCs constitute 28.42% of the borrowers

About 11% of the loans have been given to Minority community borrowers.

As per a survey conducted by the Ministry of Labour and Employment, PMMY helped in the generation of 1.12 crore net additional employment from 2015 to 2018. Out of the 1.12 crore of the estimated increase in employment, Women accounted for 69 lakh (62%).

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