The Pradhan Mantri MUDRA Yojana (PMMY), launched on 8 April 2015, has completed 11 years as a major financial inclusion scheme for India’s small entrepreneurs. It provides collateral-free loans to non-corporate, non-farm income-generating activities and has become a key instrument for expanding credit access to micro and small businesses. The scheme is designed to support those traditionally excluded from formal banking and to promote self-employment across the country.
Purpose of the Scheme
PMMY was created to fund the unfunded by offering easy credit through banks, non-banking financial companies and microfinance institutions. It supports micro-enterprises in manufacturing, trading and services. Allied activities such as dairy, poultry and beekeeping are also covered. The scheme has helped reduce dependence on informal lenders and has widened the reach of institutional credit.
Loan Categories Under PMMY
MUDRA loans are provided in four categories based on the stage of business growth:
- Shishu: loans up to ₹50,000.
- Kishor: loans above ₹50,000 and up to ₹5 lakh.
- Tarun: loans above ₹5 lakh and up to ₹10 lakh.
- TarunPlus: loans above ₹10 lakh and up to ₹20 lakh.
These loans can be used for term finance and working capital needs. Interest rates are governed by Reserve Bank of India guidelines, and repayment terms remain flexible.
Key Achievements and Beneficiaries
PMMY has sanctioned more than 57.79 crore loans, with total disbursement of about ₹40.07 lakh crore. Women account for about two-thirds of the beneficiaries. Around one-fifth of the loans have gone to first-time entrepreneurs. The scheme has also reached Scheduled Castes, Scheduled Tribes and Other Backward Classes in large numbers, strengthening its social impact.
Role in Inclusive Growth
PMMY is part of the broader financial inclusion framework built on three goals – banking the unbanked, securing the unsecured and funding the unfunded. By improving access to formal credit, it has supported grassroots entrepreneurship, widened economic participation and contributed to the vision of Viksit Bharat by 2047.
Last Modified: April 28, 2026