The Pradhan Mantri Mudra Yojana (PMMY) has gained attention recently as India’s Union Minister of State for Finance briefed the Rajya Sabha about this important government scheme. Initiated in 2015, PMMY has become a crucial strategy in fostering economic growth within the non-corporate, small or micro businesses by providing them access to loans. Despite the pandemic impacting its targets for the financial year 2020-21, PMMY has consistently achieved national-level objectives since its launch.
About Pradhan Mantri Mudra Yojana
Launched in 2015, PMMY is a financial initiative aimed at offering loans up to Rs.10 lakh to non-farm, non-corporate small or micro enterprises. Aimed at promoting entrepreneurial culture, the scheme offers funds through various financial intermediaries like Banks, Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).
Managed by the government-owned Micro Units Development & Refinance Agency Ltd. (MUDRA), the scheme does not directly provide loans to individuals but creates an effective channel for lending through existing financial institutions. To meet the unique funding needs of different enterprises, MUDRA has designed three loan products: ‘Shishu’ for loans up to Rs. 50,000; ‘Kishore’ for loans above Rs. 50,000 and up to Rs. 5 lakh, and ‘Tarun’ for loans above Rs. 5 lakh and up to Rs. 10 lakh.
Performance and Impact of PMMY
Since its launch, the Pradhan Mantri Mudra Yojana has reported impressive achievements. More than 32.53 crore loans involving a sanctioned amount of Rs. 17.32 lakh crore have been extended under PMMY. Benefiting largely women entrepreneurs, SC/ST/OBC borrowers, minority community borrowers and new entrepreneurs, the scheme has made a significant impact on disadvantaged sections of society.
A survey by the Ministry of Labour and Employment assesses that PMMY has played a role in creating 1.12 crore net additional jobs from 2015 to 2018. Within these job opportunities, around 69 lakh or 62% were occupied by women.
Steps to Improve the Scheme
The government has actively sought out ways to enhance the accessibility and efficiency of PMMY. Feature developments like online application systems through ‘psbloansin59minutes’ and ‘udyamimitra’ portals offer a user-friendly interface for potential loan applicants. Advancements in automation have also enabled some Public Sector Banks (PSBs) to offer end-to-end digital lending for automated sanctions under PMMY.
Moreover, publicity campaigns by PSBs and Mudra Ltd. have increased awareness about the scheme, while the appointment of Mudra Nodal Officers in PSBs ensures better monitoring and assistance for prospective borrowers. Considering the achievements and proactive improvement measures, PMMY continues to be a significant economic policy intervention by the Indian government.
