Pradhan Mantri Mudra Yojana

Transforming India by 'Funding the Unfunded'

Abstract

The setting up of Pradhan Mantri Mudra Yojana and MUDRA attempted to fill or reduce the financial crisis in the micro enterprises to stimulate economic development. MUDRA has been aimed at administering a common platform to both banks and tiny enterprises customers and plays a significant role by bringing them together to this platform. It has been set up as a refinancing institution. Its main goal is to provide mudra loans up to Rs 10,00,000 to the micro enterprises through last mile financiers, so that they can start or expand their businesses. Its primary goal is to refinance various last-mile financial institutions that support the growth of small businesses in the non-corporate sector by lending money to them. These last mile financial institutions include NBFCs, Regional Rural Banks, Commercial Banks, Small Finance Banks, and MFIs. These institutions provide funds to the small business sector which is involved in manufacturing, trading, and Agri-allied activities. The borrower can approach to any of financial institution to get the benefit of mudra loans and to serve the purpose of their existence.

Mudra scheme helps millions of small borrowers who were facing the acute financial shortage due to numerous reasons and were striving hard to get the financial assistance for starting or expanding their business activities. In this study, an effort has been made to use statistical methods like mean, coefficient of variation, and trend analysis to examine the category-wise performance of various mudra loans during a six-year period, from 2016–17 to 2021–22. The analysis is based on secondary information that was obtained from the MUDRA official website. The interpretation of the figures for the study period indicates that among the three main categories of Mudra Loans, Shishu Loan Scheme has captured the largest share in terms of number of accounts as well as in terms of amount sanctioned followed by Kishore and Tarun Loans. Since its origin, over a period of seven years of operations i.e., from 2015-16 to 2021-22, PMMY has benefitted in aggregate approximately 34.92 crore loan account holders of micro enterprise segment by administering an aggregate amount of 18.90 crore.