Apr 10: The Pradhan Mantri MUDRA Yojana (PMMY) was launched on 8th April 2015 by Prime Minister Shri Narendra Modi with the aim to facilitate easy collateral-free micro-credit of up to ₹10 lakhs to non-corporate, non-farm small and micro-entrepreneurs for income generating activities. The loans under PMMY are provided by Member Lending Institutions (MLIs), i.e., Banks, Non-Banking Financial Companies (NBFCs), Micro-Finance Institutions (MFIs) and other financial intermediaries.
Upon marking the successful 8th anniversary of the PMMY, Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman said, “Brought under the visionary leadership of Prime Minister Shri Narendra Modi, the scheme has enabled easy and hassle-free access to credit to micro-enterprises and has helped a large number of young entrepreneurs establish their businesses.”
In reference to the PMMY data, Smt. Sitharaman said, “Since the launch of the scheme, as of 24.03.2023, about ₹23.2 lakh crore has been sanctioned in 40.82 crore loan accounts. About 68% of accounts under the scheme belong to women entrepreneurs and 51% of accounts belong to entrepreneurs of SC/ST and OBC categories. This demonstrates that easy availability of credit to the budding entrepreneurs of the country has led to innovation and sustained increase in per capita income.”
Highlighting indigenous growth through MSMEs, the Finance Minister said, “The growth of MSMEs has contributed massively to the “Make in India” programme as strong domestic MSMEs lead to increased indigenous production both for domestic markets as well as for exports. The PMMY scheme has helped in the generation of large-scale employment opportunities at the grassroots level and also has proved to be a game changer while boosting the Indian economy.”
On the occasion, Union Minister of State (MoS) for Finance Dr Bhagwat Kisanrao Karad said, “The PMMY scheme aims to provide collateral-free access to credit in a seamless manner to micro-enterprises in the country. It has brought the unserved and under-served sections of society within the framework of institutional credit. The government policy of promoting MUDRA has led millions of MSME enterprises in the formal economy. It has helped them to get out of the clutches of money-lenders offering very high-cost funds.”
As we celebrate the 8th anniversary of providing financial inclusion through the pillars of Pradhan Mantri MUDRA Yojana (PMMY), let us glance through some of the major features and achievements of the Scheme:
The implementation of the financial inclusion programme in the country is based on three pillars, namely,
- Banking the Unbanked
- Securing the Unsecured and
- Funding the Unfunded
These three objectives are being achieved through leveraging technology and adopting a multi-stakeholders collaborative approach while serving the unserved and underserved as well.
One of the three pillars of FI – Funding the Unfunded, is reflected in the Financial Inclusion ecosystem through PMMY, which is being implemented with the objective to provide access to credit for small entrepreneurs.
Features
- The loans have been divided into three categories based on the need for finance and the stage in the maturity of the business. These are Shishu (loans up to ₹50,000/-), Kishore (loans above ₹50,000/- and up to ₹5 lakhs), and Tarun (loans above ₹5 lakhs and up to ₹10 lakhs).
- Loans under PMMY are provided to meet both term loan and working capital components of financing for income-generating activities in manufacturing, trading and service sectors, including activities allied to agriculture such as poultry, dairy, beekeeping, etc.
- The interest rate is decided by lending institutions in terms of RBI guidelines. In the case of a working capital facility, interest is charged only on money held overnight by the borrower.
Achievements under Pradhan Mantri Mudra Yojana (PMMY) as on 24.03.2023
- More than 40.82 crore loans amounting to ₹23.2 lakh crore have been sanctioned since the launching of the Scheme. Approximately 21% of the totalloans have been sanctioned to New Entrepreneurs.
- Approximately 69% of loans in the totalnumber of loans have been sanctioned to Women Entrepreneurs & 51% of loans have been sanctioned to SC/ST/OBC categories of borrowers.
- Category-wise breakup:-
| Category | No. of Loans (%) | Amount Sanctioned (%) |
| Shishu | 83% | 40% |
| Kishore | 15% | 36% |
| Tarun | 2% | 24% |
| Total | 100% | 100% |
- Targets have been achieved since the inception of the Scheme barring F.Y. 2020-21 due to the Covid-19 pandemic. Year-wise sanction amount is as follows:-
| Year | No of Loans Sanctioned (in cr.) | Amount Sanctioned(₹ Lakh crore) |
| 2015-16 | 3.49 | 1.37 |
| 2016-17 | 3.97 | 1.80 |
| 2017-18 | 4.81 | 2.54 |
| 2018-19 | 5.98 | 3.22 |
| 2019-20 | 6.22 | 3.37 |
| 2020-21 | 5.07 | 3.22 |
| 2021-22 | 5.37 | 3.39 |
| 2022-23 (as of 24.03.2023)* | 5.88 | 4.32 |
| Total | 40.82 | 23.2 |
*Provisional
Any other relevant information
Interest Subvention of 2% on prompt repayment of Shishu loans extended under PMMY for a period of 12 months to all eligible borrowers’
- Announced by the Finance Minister on 14.05.2020 under Aatma Nirbhar Bharat Abhiyan. The Scheme was formulated as a specific response to an unprecedented situation and aimed to alleviate financial stress for borrowers at the ‘bottom of the pyramid’ by reducing their cost of credit.
- The Scheme was operational till 31.08.2021.
- ₹636.89 crores have been disbursed by SIDBI to MLIs for onward credit of subvention amount into accounts of borrowers.
Credit Guarantee Fund for Micro Units (CGFMU)
- Credit Guarantee Fund for Micro Units was set up in January 2016 under the aegis of the National Credit Guarantee Trustee Company Ltd. (NCGTC), a wholly-owned company of the Government of India, to provide a guarantee to:
- Loans extended to eligible micro units under Pradhan Mantri Mudra Yojana (PMMY) up to ₹10 lakhs, by Banks/ Non-Banking Financial Companies (NBFCs)/ Micro Finance Institutions (MFIs)/ other financial intermediaries;
- Overdraft loan amount of ₹5,000 (enhanced to ₹10,000 in Sep 2018) sanctioned under Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts; and
- Self Help Group (SHG) portfolio between ₹10 lakh to ₹20 lakhs (w.e.f. 01.04.2020).
