The Pradhan Mantri Mudra Yojana (PMMY), a government initiative launched in 2015, shows a significant increase in the number of loans sanctioned. Since its implementation, it has sanctioned over 28.68 crore loans, amounting to Rs. 14.96 lakh crore. These loans aim to provide financial assistance to the non-corporate, non-farm small/micro-enterprises throughout the country.
About Pradhan Mantri Mudra Yojana (PMMY)
Established by the Government, PMMY intends to aid non-corporate and non-farm small/micro-enterprises by offering loans up to Rs. 10 lakh. This initiative aims at boosting the economic self-sufficiency of these enterprises and promotes entrepreneurship across the country.
Funding Provision
Micro Units Development & Refinance Agency Ltd., or MUDRA, is a financial institution set up by the Government to facilitate the funding provisions of PMMY. Its primary function is to provide funds to the non-corporate small business sector. These funds are made accessible through various last-mile financial institutions, including Banks, Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs). It’s crucial to note that MUDRA does not lend directly to micro-entrepreneurs or individuals.
Three Product Categories
MUDRA offers three product categories under PMMY: ‘Shishu’, ‘Kishore’ and ‘Tarun’. Each category corresponds with the stage of growth and funding needs of the beneficiary micro unit.
‘Shishu’ covers loans up to Rs. 50,000, while ‘Kishore’ caters for loans above Rs. 50,000 and up to Rs. 5 lakh. The ‘Tarun’ category extends to loans above Rs. 5 lakh and up to Rs. 10 lakh. All loans procured under this scheme are collateral-free.
Impact and Achievements
PMMY aims to empower disadvantaged sections of society. Among the beneficiaries of the loan scheme are women entrepreneurs, SC/ST/OBC borrowers, Minority community borrowers, and new entrepreneurs. These loans have played a vital role in promoting entrepreneurship and economic activity among these groups.
According to a survey by the Ministry of Labour and Employment, PMMY contributed to the generation of 1.12 crore net additional employment from 2015 to 2018. Women accounted for about 69 lakh (62%) of the estimated increase in employment. This data underscores the significant impact of PMMY on the upliftment and empowerment of women in society.
The Pradhan Mantri Mudra Yojana initiated by the government has shown noteworthy success in promoting entrepreneurship, boosting economic growth, and creating job opportunities. Its emphasis on supporting disadvantaged sections of society further highlights the initiative’s commitment to inclusive economic growth and development.