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PM Mudra scheme clocks 8 years, banks sanction Rs 23.2 lakh crore to about 41 crore beneficiaries

Pradhan Mantri Mudra Yojana (PMMY) was launched on April 8, 2015, by Prime Minister Narendra Modi to facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.

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Banks and financial institutions have sanctioned Rs 23.2 lakh crore to over 40.82 crore beneficiaries under the Mudra Yojana launched to fund the unfunded eight years ago.

Pradhan Mantri Mudra Yojana (PMMY) was launched on April 8, 2015, by Prime Minister Narendra Modi to facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.

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Loans under PMMY are provided by Member Lending Institutions (MLIs) — banks, non-banking financial companies (NBFCs), microfinance institutions (MFIs) and other financial intermediaries, the finance ministry said in a statement on Saturday.

Speaking on the occasion of the 8th anniversary, Finance Minister Nirmala Sitharaman said, “Since the launch of the scheme, as of March 24, 2023, about Rs 23.2 lakh crore has been sanctioned in 40.82 crore loan accounts”.

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About 68 per cent of accounts under the scheme belong to women entrepreneurs, and 51 per cent of accounts belong to entrepreneurs of SC/ST and OBC categories. This demonstrates that easy availability of credit to the budding entrepreneurs of the country has led to innovation and sustained increase in per capita income, she added.

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Highlighting indigenous growth through MSMEs, the finance minister said, “The growth of MSMEs has contributed massively to the ‘Make in India’ programme, as strong domestic MSMEs lead to increased indigenous production both for domestic markets as well as for exports. The PMMY scheme has helped in the generation of large-scale employment opportunities at the grassroots level, and also has proved to be a game changer while boosting the Indian economy”.

Minister of State for Finance Bhagwat K Karad said the PMMY scheme aims to provide collateral-free access to credit in a seamless manner to micro-enterprises in the country.

“It has brought the unserved and under-served sections of the society within the framework of institutional credit. The government policy of promoting MUDRA has led millions of MSME enterprises in the formal economy and has helped them to get out of the clutches of money-lenders offering very high-cost funds,” he added.

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Implementation of the financial inclusion (FI) programme in the country is based on three pillars – Banking the Unbanked, Securing the Unsecured and Funding the Unfunded.

The scheme was launched to encourage small businesses, and banks were asked to provide collateral-free loans up to Rs 10 lakh under three categories — Shishu (up to Rs 50,000), Kishore (between Rs 50,000 and Rs 5 lakh) and Tarun ( Rs 10 lakh).

Of the total, Shishu accounts for 83 per cent of the total loans while Kishore 15 per cent and the remaining 2 per cent Tarun.

Targets have been achieved since the inception of the scheme barring during 2020-21 due to the Covid-19 pandemic, the statement said.

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