{"id":332292,"date":"2025-04-09T14:58:34","date_gmt":"2025-04-09T09:28:34","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=332292"},"modified":"2025-04-09T14:58:34","modified_gmt":"2025-04-09T09:28:34","slug":"pm-mudra-yojana-significance-challenges-explained-pointwise","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/pm-mudra-yojana-significance-challenges-explained-pointwise\/","title":{"rendered":"PM Mudra Yojana- Significance & Challenges- Explained Pointwise"},"content":{"rendered":"

On 8 April 2025, India marks 10 years of the Pradhan Mantri MUDRA Yojana (PMMY). PM Mudra Yojana, the Flagship Programme of the Prime Minister aimed at Funding the Unfunded micro enterprises and small businesses. By removing the burden of collateral and simplifying access, MUDRA laid the foundation for a new era of grassroots entrepreneurship. Over the past decade, the scheme has disbursed over 52 crore loans worth \u20b932.61 lakh crore.<\/span><\/p>\n\n\n\n\n
Table of Content<\/strong><\/td>\n<\/tr>\n
What are the salient Features of the Scheme?<\/a>
\nWhat are the achievements and impact of PM Mudra Yojana?<\/a>
\nWhat is the significance of MUDRA Yojana?<\/a>
\nWhat are the challenges faced by the micro enterprises?<\/a>
\nWhat should be the way forward?<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/a>What are the salient Features of the Scheme?<\/span><\/b><\/h2>\n

MUDRA was set up for <\/span>development and refinancing activities<\/b> relating to <\/span>micro units.<\/b> PMMY ensures <\/span>collateral-free institutional credit up to Rs 20 lakh, <\/b>which is provided by <\/span>Member Lending Institutions (MLIs)<\/b> i.e. <\/span>Scheduled Commercial Banks (SCBs),<\/b> Regional Rural Banks (RRBs),<\/b> Non-Banking Financial Companies (NBFCs<\/b>) and <\/span>Micro Finance Institutions (MFIs<\/b>). Under the scheme, three categories of interventions have been formulated which include:
\n<\/span><\/p>\n

\"PM
Source- Copyright infringement not intended<\/figcaption><\/figure>\n\n\n\n\n\n\n\n
Category<\/b><\/td>\nLoan Amount<\/b><\/td>\nTarget Segment<\/b><\/td>\nShare of Total Loans<\/b><\/td>\nKey Sectors Funded<\/b><\/td>\n<\/tr>\n
Shishu<\/b><\/td>\nUp to \u20b950,000<\/span><\/td>\nFirst-time entrepreneurs, nano-units<\/span><\/td>\n~<\/b>88% of total loans<\/span><\/td>\nStreet vendors, tailoring, petty shops, dairy, home-based work<\/span><\/td>\n<\/tr>\n
Kishore<\/b><\/td>\n\u20b950,001\u2013\u20b95 lakh<\/span><\/td>\nSmall-scale expansion, working capital<\/span><\/td>\n~9\u201310% of total loans<\/span><\/td>\nFood stalls, repair shops, beauty parlors, transport<\/span><\/td>\n<\/tr>\n
Tarun<\/b><\/td>\n\u20b95\u2013\u20b910 lakh<\/span><\/td>\nGrowth-stage small businesses<\/span><\/td>\n~2% of total loans<\/span><\/td>\nManufacturing, logistics, services, retail stores<\/span><\/td>\n<\/tr>\n
Tarun Plus<\/b><\/td>\nLoans above \u20b910 lakh and up to \u20b920 lakh<\/td>\nDesigned specifically for Tarun category, who have previously availed and successfully repaid loans<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/a>What are the achievements and impact of PM Mudra Yojana?<\/span><\/b><\/h2>\n

1. Massive Outreach & Entrepreneurial Shift<\/b>: Since 2015, over <\/span>52 crore loans worth \u20b932.61 lakh crore<\/b> have been sanctioned under PMMY, shifting the mindset from job-seeking to <\/span>job-creating<\/b>, especially in small towns and rural India.<\/span><\/p>\n

2. MSME Credit Surge<\/b>: MSME lending rose from \u20b98.51 lakh crore (FY14)<\/b> to \u20b927.25 lakh crore (FY24)<\/b>; projected to cross \u20b930 lakh crore (FY25)<\/b>. Their credit share in total bank lending grew from 15.8% to nearly 20%<\/b>, boosting grassroots enterprise and self-reliant growth.<\/p>\n

3. Women Empowerment through Finance<\/b>: Women make up <\/span>68% of all PMMY beneficiaries<\/b>. Average disbursement per woman grew at <\/span>13% CAGR<\/b>, and their incremental deposits at <\/span>14% CAGR<\/b>, indicating rising financial empowerment and participation in the workforce.<\/span><\/p>\n

4. Inclusive Growth for Marginalized Groups<\/b>: <\/span>50% of accounts<\/b> are held by SC\/ST\/OBCs and <\/span>11%<\/b> by minorities. PMMY has helped integrate these communities into the formal financial system and entrepreneurial economy.<\/span><\/p>\n

5. Shift Towards Growth-Stage Financing<\/b>: The share of <\/span>Kishor loans<\/b> (\u20b950,000\u2013\u20b95 lakh) grew from <\/span>5.9% (FY16)<\/b> to <\/span>44.7% (FY25)<\/b>, indicating enterprise upscaling. <\/span>Tarun loans<\/b> (\u20b95\u2013\u20b910 lakh) also show growing traction.<\/span><\/p>\n

6. Rising Loan Sizes & Confidence<\/b>: Average loan size increased from <\/span>\u20b938,000 (FY16)<\/b> to <\/span>\u20b91.02 lakh (FY25)<\/b>. Loan disbursal grew <\/span>36% in FY23<\/b>, reflecting <\/span>revived entrepreneurial confidence<\/b> and improved scale of operations.<\/span><\/p>\n

7. Top Performing States and UTs<\/b>: Leading states in total loan disbursals:<\/p>\n

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