Introduction to the Pradhan Mantri Mudra Yojana 

  • The Pradhan Mantri Mudra Yojana (PMMY) marked its tenth year on 8th April 2025.
  • Initiated in 2015, this programme has been instrumental in the provision of collateral-free financial aid to micro and small enterprises (MSEs) throughout India.

 

Noteworthy Achievements of PMMY

  • In the course of its existence, the PMMY has disbursed over Rs 32.61 lakh crore through 52 crore loans, consisting of over 100 million first-time borrowers.
  • Lending to MSME escalated from Rs 8.5 lakh crore in FY14 to Rs 27.25 lakh crore in FY24, thereby increasing its share in bank credit from 15.8% to nearly 20%.
  • Inclusivity is a key achievement, with women making up 68% of the beneficiaries. Loans and deposits for women have grown at a CAGR of 13% and 14% respectively, from FY16 to FY25.
  • Social inclusion is achieved by half of the PMMY accounts being held by SC, ST, OreoBC entrepreneurs, with a further 11% by minorities, as per SBI data.
  • During the Covid-19 crisis, a 2% interest-subvention on Shishu loans under Atma Nirbhar Bharat aided to prevent defaults and safeguard livelihoods.

 

Understanding the Pradhan Mantri Mudra Yojana (PMMY)

  • MUDRA (Micro Units Development and Refinance Agency), is an essential scheme by the Government of India, launched in 2015.
  • The scheme aims to provide affordable and collateral-free credit through Member Lending Institutions (MLIs).

 

Key Features of PMMY

  • The scheme is a Central Sector Scheme.
  • Loans are extended by Member Lending Institutions (MLIs), including Scheduled Commercial Banks, RRBs, NBFCs, and MFIs.
  • The responsibility of refinancing is carried out by MUDRA Ltd. (Micro Units Development & Refinance Agency), which provides refinancing to MLIs. They do not lend directly to the borrowers.
  • The Credit Guarantee Fund for Micro Units (CGFMU), set up alongside MUDRA in 2015, provides a credit guarantee.

 

Benefits of PMMY

  • Advantages of PMMY scheme include no processing fees, requirement for collateral, easy access to credit, and flexible repayment terms.
  • Another essential benefit includes the MUDRA Card, which is a debit card issued against the loan account to help meet working capital needs.