Blitz Bureau
APRIL 8 marked 10 years of 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. 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 – in people’s aspirations and in their ability to build. Trust in the belief that even the smallest dreams deserve a platform to grow.
MSME credit boom
Since its launch in April 2015, the 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.
An 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 per cent in FY14 to nearly 20 per cent in FY24. This expansion has enabled businesses in smaller towns and rural areas to access financial support that was previously unavailable, strengthening India’s selfreliant economy and driving grassroots job creation.
Empowering women
Women account for 68 per cent 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 per cent, reaching Rs 62,679, while per woman incremental deposits grew at a CAGR of 14 per cent to Rs 95,269.
The scheme has also made significant progress in breaking traditional credit barriers. According to the SBI report, 50 per cent of Mudra accounts are held by SC, ST and OBC entrepreneurs, ensuring wider access to formal finance. Furthermore, 11 per cent of Mudra loan holders belong to minority communities.
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 per cent in FY16 to 44.7 per cent in FY25, indicating a shift from micro to small enterprises. The Tarun category (Rs 5 lakh to Rs 10 lakh) is also gaining momentum.
Bigger ticket size
A telescopic view of total loans sanctioned and disbursed under PMMY reveals that the scheme’s USP has been well received by a diverse base of intended beneficiaries, thereby strengthening the economic influence of the bottom of the pyramid.
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 per cent in FY23, indicating a strong revival of entrepreneurial confidence across the country.
As of February 28, 2025, Tamil Nadu has recorded the highest disbursal among states at Rs 3,23,647.76 crore. Uttar Pradesh follows with Rs 3,14,360.86 crore, while Karnataka ranks third with ₹3,02,146.41 crore. West Bengal and Bihar have also seen significant disbursals. Among Union Territories, Jammu & Kashmir leads with a total disbursal of Rs 45,815.92 crore across 21,33,342 loan accounts.
Funding the unfunded
Micro enterprises constitute a major economic segment and provides large employment after agriculture. This segment includes micro units engaged in manufacturing, processing, trading and services sector.
Pradhan Mantri Mudra Yojana (PMMY) under the Micro Units Development and Refinancing Agency (Mudra) was set up by Government for development and refinancing activities relating to micro units. The PMMY ensures that collateral-free institutional credit up to Rs 20 lakh is provided by member lending institutions. 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)
The International Monetary Fund (IMF) has consistently acknowledged the impact of the PMMY in expanding financial access and promoting inclusive entrepreneurship. In ten years, the scheme has demonstrated the power of financial inclusion and the strength of grassroots innovation.
