PRADHAN MANTRI MUDRA YOJANA
Why in News
- Pradhan Mantri MUDRA Yojana (PMMY) completed 11 years on 8 April 2026
- The scheme was launched in:
- 2015 by Narendra Modi
- It has played a major role in:
- Financial inclusion
- Entrepreneurship development
- MSME growth
It is considered a key scheme for “Funding the Unfunded”
OBJECTIVES OF PMMY
- The core objective is: “Funding the Unfunded”
- It aims to:
- Provide collateral-free loans
- Support small and micro entrepreneurs
- Target group:
- Non-corporate, non-farm sector
Focus is on:
- Individuals who were excluded from formal banking system
KEY FEATURES
(A) Loan Nature
- Collateral-free loans up to ₹20 lakh
- Provided through:
- Banks
- NBFCs (Non-Banking Financial Companies)
- MFIs (Micro Finance Institutions)
(B) LOAN CATEGORIES
PMMY loans are divided based on business stage:
- Shishu
- Loans up to ₹50,000
- For early-stage businesses
- Kishor
- ₹50,000 to ₹5 lakh
- For growing businesses
- Tarun
- ₹5 lakh to ₹10 lakh
- For established businesses
- Tarun Plus
- ₹10 lakh to ₹20 lakh
- For expansion stage
(C) SECTOR COVERAGE
- Loans are given for:
- Manufacturing sector
- Trading sector
- Service sector
- Includes allied activities:
- Dairy
- Poultry
- Beekeeping
(D) INTEREST & REPAYMENT
- Interest rates:
- Based on RBI guidelines
- Repayment:
- Flexible terms
SCALE & ACHIEVEMENTS
- Total loans sanctioned:
- 57.59 crore loans
- Total amount disbursed:
- ₹40.07 lakh crore
(A) Women Empowerment
- Around two-thirds of loans given to women
Indicates strong role in:
- Women entrepreneurship
(B) First-Time Entrepreneurs
- Around one-fifth loans given to:
- New entrepreneurs
- About:
- 12.15 crore loans
- Amount: ₹12 lakh crore
(C) Social Inclusion
- Major beneficiaries:
- SC/ST/OBC communities (about 51%)
- Women (around 67%)
Supports inclusive growth
CATEGORY WISE PERFORMANCE
Shishu Category
- 8.80 crore accounts
- ₹2.47 lakh crore sanctioned
- ₹2.42 lakh crore disbursed
Kishor Category
- 2.79 crore accounts
- ₹5.09 lakh crore sanctioned
- ₹4.87 lakh crore disbursed
Tarun Category
- 55 lakh accounts
- ₹4.82 lakh crore sanctioned
- ₹4.67 lakh crore disbursed
ROLE IN FINANCIAL INCLUSION
PMMY is part of broader Financial Inclusion (FI) strategy, based on:
- Banking the Unbanked
- Securing the Unsecured
- Funding the Unfunded
PMMY directly supports:
- Credit inclusion
IMPORTANCE OF MSMEs
- MSMEs are:
- Backbone of industrial economy
- They:
- Support large industries
- Create employment
- Promote balanced development
PMMY strengthens:
- MSME ecosystem
IMPACT OF PMMY
(A) Economic Impact
- Promotes:
- Self-employment
- Entrepreneurship
- Reduces:
- Dependence on informal lenders
(B) Social Impact
- Empowers:
- Women
- Marginalised communities
- Encourages:
- Financial independence
(C) Structural Impact
- Expands:
- Formal credit system
- Improves:
- Access to institutional finance
ROLE OF TECHNOLOGY
- Use of:
- Digital platforms
- Data analytics Makes:
- Loan access faster and easier
CHALLENGES
- Risk of:
- Loan defaults (NPAs)
- Need for:
- Better credit assessment
- Awareness gaps in:
- Rural areas
- Monitoring of:
- Loan utilisation
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