More than 40.82 crore loans amounting to ₹23.2 lakh crore sanctioned under Pradhan Mantri MUDRA Yojana (PMMY) since inception

MUDRA helped in generation of large-scale employment opportunities at grassroots level and also proved a game changer while boosting Indian economy: Finance Minister Smt. Nirmala Sitharaman

PMMY eased collateral free access to credit in a seamless manner to micro enterprises in the country: Mos Finance Dr Bhagwat Karad

The Pradhan Mantri MUDRA Yojana (PMMY) was launched on 8^th April 2015 by Prime Minister Shri Narendra Modi with the aim to facilitate easy collateral-free micro credit of up to ₹10 lakh to non-corporate, non-farm small and micro entrepreneurs for income generating activities. The loans under PMMY are provided by Member Lending Institutions (MLIs), i.e., Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.

Upon marking successful 8^th anniversary of the PMMY, Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman said, “Brought under the visionary leadership of Prime Minister Shri Narendra Modi, the scheme has enabled easy and hassle-free access to credit to micro-enterprises and has helped a large number of young entrepreneurs establish their businesses."

In reference to the PMMY data, Smt. Sitharaman said, “Since the launch of the scheme, as of 24.03.2023, about ₹23.2 lakh crore has been sanctioned in 40.82 crore loan accounts. About 68% of accounts under the scheme belong to women entrepreneurs and 51% 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.”

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.”

On the occasion, Union Minister of State (MoS) for Finance Dr Bhagwat Kisanrao 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.”

As we celebrate the 8th anniversary of providing financial inclusion through the pillars of Pradhan Mantri MUDRA Yojana (PMMY), let us glance through some of the major features and achievements of the Scheme:

The implementation of financial inclusion programme in the country is based on three pillars, namely,

1. Banking the Unbanked
2. Securing the Unsecured and
3. Funding the Unfunded

These aforesaid three objectives are being achieved through leveraging technology and adopting multi-stakeholders’ collaborative approach, while serving the unserved and underserved as well.

One of the three pillars of FI - Funding the Unfunded, is reflected in the Financial Inclusion ecosystem through PMMY, which is being implemented with the objective to provide access to credit for small entrepreneurs.

Features

• The loans have been divided into three categories based on the need for finance and stage in maturity of the business.  These are Shishu (loans up to ₹50,000/-), Kishore (loans above ₹50,000/- and up to ₹5 lakh), and Tarun (loans above ₹5 lakh and up to ₹10 lakh). 

• Loans under PMMY are provided to meet both term loan and working capital components of financing for income generating activities in manufacturing, trading and service sectors, including activities allied to agriculture such as poultry, dairy, beekeeping, etc. 

• The rate of interest is decided by lending institutions in terms of RBI guidelines.  In case of working capital facility, interest is charged only on money held overnight by borrower.

Achievements under Pradhan Mantri Mudra Yojana (PMMY) as on 24.03.2023

• More than 40.82 crore loans amounting to ₹23.2 lakh crore have been sanctioned since launch of the Scheme.  Approximately 21% of the total loans have been sanctioned to New Entrepreneurs.
• Approximate 69% loans of the total number of loans have been sanctioned to Women Entrepreneurs & 51% loans have been sanctioned to SC/ST/OBC categories of borrowers.
• Category-wise breakup:-

Category	No. of Loans (%)	Amount Sanctioned (%)
Shishu	83%	40%
Kishore	15%	36%
Tarun	2%	24%
Total	100%	100%

• Targets have been achieved since the inception of the Scheme barring F.Y. 2020-21 due to Covid-19 pandemic. Year-wise sanction amount is as follows:-

Year	No of Loans Sanctioned (in cr.)	Amount Sanctioned (₹ Lakh crore)
2015-16	3.49	1.37
2016-17	3.97	1.80
2017-18	4.81	2.54
2018-19	5.98	3.22
2019-20	6.22	3.37
2020-21	5.07	3.22
2021-22	5.37	3.39
2022-23 (as on 24.03.2023)*	5.88	4.32
Total	40.82	23.2

   *Provisional

Any other relevant information

Interest Subvention of 2% on prompt repayment of Shishu loans extended under PMMY for a period of 12 months to all eligible borrowers’

• Announced by the Finance Minister on 14.05.2020 under Aatma Nirbhar Bharat Abhiyan. The Scheme was formulated as a specific response to an unprecedented situation and aimed to alleviate financial stress for borrowers at the ‘bottom of the pyramid’ by reducing their cost of credit.
• The Scheme was operational till 31.08.2021.
• ₹636.89 crore have been disbursed by SIDBI to MLIs for onward credit of subvention amount into accounts of borrowers.

Credit Guarantee Fund for Micro Units (CGFMU)

• Credit Guarantee Fund for Micro Units was set up in January 2016 under the aegis of the National Credit Guarantee Trustee Company Ltd. (NCGTC), a wholly-owned company of Government of India, to provide guarantee to:

(a) Loans extended to eligible micro units under Pradhan Mantri Mudra Yojana (PMMY) up to ₹10 lakh, by Banks/ Non-Banking Financial Companies (NBFCs)/ Micro Finance Institutions (MFIs)/ other financial intermediaries;

(b) Overdraft loan amount of ₹5,000 (enhanced to ₹10,000 in Sep, 2018) sanctioned under Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts; and

(c) Self Help Group (SHG) portfolio between ₹10 lakh to ₹20 lakh (w.e.f. 01.04.2020).

Collateral-free microcredit access expanded under PMMY, broadening financial inclusion, targeted borrower support, and guarantee coverage. The Scheme provides collateral free microcredit through Member Lending Institutions for income generating activities across sectors, categorised into three loan bands-Shishu, Kishore and Tarun-with interest set by lenders within central bank guidelines. It advances financial inclusion under three pillars-Banking the Unbanked, Securing the Unsecured and Funding the Unfunded-prioritises women and disadvantaged borrowers, and is supported by an interest subvention for prompt repayment on the smallest loans and a Credit Guarantee Fund to back eligible micro loans.