Ministry of Finance is committed to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes. Financial needs of all stakeholders ranging from the budding entrepreneurs to the hard-working farmers has 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 upto 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 upto 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 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 upto  Rs. 50,000/-
• Kishore : covering loans above  Rs. 50,000/- and upto Rs. 5 lakh
• Tarun : covering loans above  Rs. 5 lakh and upto 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 of ‘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 Ministry of Labour and Employment, PMMY helped in generation of 1.12 crore net additional employment from 2015 to 2018.  Out of the 1.12 crore of estimated increase in employment, Women accounted for 69 lakh (62%).

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