New Delhi, April 8 (KNN) India commemorated a milestone on Tuesday as the Pradhan Mantri Mudra Yojana (PMMY) completed ten years since its inception. 

Launched on April 8, 2015, this flagship credit support program was designed to provide institutional financing to non-corporate, non-farm micro and small enterprises that traditionally lacked access to formal credit channels.

Official data reveals the substantial impact of the initiative, with more than 52 crore loans sanctioned totaling Rs 32.61 lakh crore over the decade. 

The scheme has demonstrated remarkable growth in average loan size, increasing from Rs 38,000 in FY16 to Rs 1.02 lakh in FY25, indicating strengthening demand for higher-value financing among small enterprises as they expand operations.

The PMMY has contributed significantly to expanding credit flow to the MSME sector. 

According to a State Bank of India report, MSME lending surged from Rs 8.51 lakh crore in FY14 to Rs 27.25 lakh crore in FY24, with projections exceeding Rs 30 lakh crore in FY25. 

This represents a notable shift in credit allocation patterns, with MSME financing increasing from 15.8 percent of total bank credit in FY14 to nearly 20 percent in FY24.

Women entrepreneurs have emerged as primary beneficiaries, constituting 68 percent of total Mudra loan recipients. 

The decade has witnessed substantial improvements in women’s financial inclusion, with the average loan per woman increasing at a 13 percent compound annual growth rate to reach Rs 62,679. 

Concurrently, incremental deposits by women grew at 14 percent CAGR to Rs 95,269. Government data indicates that states with higher proportions of loans to women have experienced greater employment generation in women-led MSMEs.

The initiative has made significant strides in advancing social inclusion within formal financing frameworks. 

The SBI report highlights that 50 percent of Mudra accounts are held by entrepreneurs from Scheduled Castes, Scheduled Tribes, and Other Backward Classes, while 11 percent belong to individuals from minority communities, demonstrating improved financial access for traditionally underserved demographic segments.

Analysis of loan category distribution reveals an upward trajectory in business scale among beneficiaries. 

Kishor loans (Rs 50,000-Rs 5 lakh) expanded from 5.9 percent of total disbursals in FY16 to 44.7 percent in FY25. 

The Tarun category (Rs 5-10 lakh) has also experienced increased demand, prompting the introduction of a new Tarun Plus category for enterprises seeking financing between Rs 10-20 lakh.

Tamil Nadu leads among states in total disbursals at Rs 3.23 lakh crore, closely followed by Uttar Pradesh (Rs 3.14 lakh crore), Karnataka (Rs 3.02 lakh crore), West Bengal (Rs 2.82 lakh crore), and Bihar (Rs 2.81 lakh crore). 

Maharashtra reported disbursals of Rs 2.74 lakh crore. Among Union Territories, Jammu and Kashmir topped the list with Rs 45,815.92 crore sanctioned across more than 21 lakh loan accounts.

The PMMY serves micro units engaged in manufacturing, trading, processing, and service sectors. 

These enterprises—predominantly operating as sole proprietorships or own-account enterprises—provide employment to approximately 10 crore individuals, establishing them as the second-largest employment generator after agriculture.

The International Monetary Fund has consistently recognised the scheme’s contribution to expanding financial access. 

In its 2024 report, the IMF reaffirmed that initiatives like PMMY have supported self-employment growth and economic formalisation through improved credit access. 

Previous IMF assessments in 2017, 2019, and 2023 also acknowledged the program’s role in promoting women-led businesses and enhancing financial inclusion.

The scheme operates through a network of Scheduled Commercial Banks, Regional Rural Banks, Non-Banking Financial Companies, and Microfinance Institutions, offering collateral-free loans up to Rs 20 lakh under the administration of the Micro Units Development and Refinance Agency (MUDRA).

(KNN Bureau)