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A Decade of Growth with PM Mudra Yojana
On 8 April 2025, India marks 10 years of the Pradhan Mantri MUDRA Yojana (PMMY). Pradhan Mantri Mudra Yojana (PMMY), 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. Across the country, lives have transformed. Kamlesh, a home-based tailor in Delhi, expanded her work, employed three other women, and enrolled her children in a good school. Bindu, who began with 50 brooms a day, now leads a unit producing 500. These are not exceptions anymore. They reflect a larger shift.
From stitching units and tea stalls to salons, mechanic shops, and mobile repair businesses, crores of micro-entrepreneurs have stepped forward with confidence, enabled by a system that believed in their potential. PMMY has supported these journeys by offering institutional credit to non-corporate, non-farm micro and small enterprises that form the backbone of India’s economy.At its core, the MUDRA Yojana is a story of trust. Trust in people’s aspirations and in their ability to build. Trust in the belief that even the smallest dreams deserve a platform to grow.
Achievements under PM Mudra Yojana
Since its launch in April 2015, the Pradhan Mantri Mudra Yojana (PMMY) has sanctioned over 52 crore loans worth Rs. 32.61 lakh crore, fuelling a nationwide entrepreneurial revolution. Business growth is no longer confined to big cities—it is spreading to small towns and villages, where first-time entrepreneurs are taking charge of their destinies. The shift in mindset is evident: people are no longer job seekers; they are becoming job creators.
MSME Credit Boom: A Stronger Business Ecosystem
The SBI report highlights a significant rise in credit flow to MSMEs, driven by Mudra’s impact. MSME lending surged from Rs. 8.51 lakh crore in FY14 to Rs. 27.25 lakh crore in FY24, and is projected to cross Rs. 30 lakh crore in FY25. The share of MSME credit in total bank credit increased from 15.8 percent in FY14 to nearly 20 percent in FY24, showcasing its growing role in the Indian economy. This expansion has enabled businesses in smaller towns and rural areas to access financial support that was previously unavailable, strengthening India’s self-reliant economy and driving grassroots job creation.
Financial Inclusion: Empowering Women
Women account for 68 percent of all Mudra beneficiaries, underscoring the scheme’s pivotal role in advancing women-led enterprises across the country. Between FY16 and FY25, the per woman PMMY disbursement amount increased at a CAGR of 13 percent, reaching Rs. 62,679, while per woman incremental deposits grew at a CAGR of 14 percent to Rs. 95,269. States with higher disbursement shares to women have recorded significantly higher employment generation through women-led MSMEs, reinforcing the effectiveness of targeted financial inclusion in enhancing women’s economic empowerment and labour force participation.
Financial Inclusion: Reaching Socially Marginalised Groups
PMMY has made significant progress in breaking traditional credit barriers. According to the SBI report, 50 percent of Mudra accounts are held by SC, ST and OBC entrepreneurs, ensuring wider access to formal finance. Furthermore, 11 percent of Mudra loan holders belong to minority communities, demonstrating the scheme’s contribution to inclusive growth by enabling marginalised communities to become active participants in the formal economy.
Progressive Lending: From Shishu to Tarun
Over the past ten years, Mudra has facilitated the opening of over 52 crore loan accounts, marking a steady rise in entrepreneurial activity. The share of Kishor loans (Rs. 50,000 to Rs. 5 lakh) has grown from 5.9 percent in FY16 to 44.7 percent in FY25, indicating a shift from micro to small enterprises. The Tarun category (Rs. 5 lakh to Rs. 10 lakh) is also gaining momentum, proving that Mudra is not just about starting businesses but helping them scale.
Bigger Loans, Stronger Businesses
The average ticket size of loans has nearly tripled—rising from Rs. 38,000 in FY16 to Rs. 72,000 in FY23, and further to Rs. 1.02 lakh in FY25—reflecting growing economies of scale and a deepening of both market depth and width.
Furthermore, loan disbursal rose by 36 percent in FY23, indicating a strong revival of entrepreneurial confidence across the country.
Mission, Vision and Purpose of PMMY
Salient Features of the Scheme
Pradhan Mantri Mudra Yojana (PMMY) under the Micro Units Development and Refinancing Agency (MUDRA) was set up by Government of India for development and refinancing activities relating to micro units. PMMY ensures collateral-free institutional credit up to Rs 20 lakh is provided by Member Lending Institutions (MLIs) i.e. Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).
Under the scheme, three categories of interventions have been formulated which include:
Tarun Plus: Loans above Rs. 10 lakh and up to Rs. 20 lakh (designed specifically for Tarun category, who have previously availed and successfully repaid loans)
International Recognition
The International Monetary Fund (IMF) has consistently acknowledged the impact of the Pradhan Mantri Mudra Yojana (PMMY) in expanding financial access and promoting inclusive entrepreneurship in India.
Conclusion
In ten years, Pradhan Mantri Mudra Yojana has consistently demonstrated the power of financial inclusion and the strength of grassroots innovation. Before 2014, access to credit often favoured the well-connected, while small entrepreneurs faced hurdles like complex paperwork or were forced to rely on informal finance. Banks handed out reckless loans to large corporates, while genuine borrowers lost access to credit. MUDRA stepped into this vacuum, offering a cleaner, inclusive alternative that gave everyone an equal chance.
With over 52 crore loans sanctioned, the scheme has empowered women, SC/ST/OBC communities, and rural entrepreneurs by expanding access to formal credit. The rise in average loan size, growing share of MSME credit, and the shift from micro to small enterprises reflect its growing impact. PMMY is not only fuelling self-employment and job creation, but also strengthening India’s grassroots economy and advancing equitable growth.