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