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Evaluation of PM MUDRA Yojana

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April 18, 2023

Why in news?

Recently Pradhan Mantri MUDRA Yojana (PMMY) completed 8 years contributing immensely to the inclusion of several communities that have traditionally been underrepresented as an entrepreneur.

What is Pradhan Mantri MUDRA Yojana (PMMY)?

  • PMMY provides collateral-free loans up to 10 lakh to the non-corporate, non-farm small/micro enterprises initially.
  • PMMY was launched in 2015 with the objective to encourage young person to become 1st generation entrepreneurs.
  • These loans are extended by Banks, NBFCs, Micro finance Institutions (MFIs) and other eligible financial intermediaries as notified by MUDRA Ltd.
  • MUDRA has created three products namely 'Shishu', 'Kishore' and 'Tarun'.


What are the achievements of PMMY?

  • New Entrepreneurs – The Mudra Scheme has created 8 crore new entrepreneurs.
  • Bridging the gap - The scheme has potentially bridged the gap of India’s microfinance and banking sectors providing loans to micro entrepreneurs.
  • Sub-culture of poverty - The PMMY has reduced the sub culture of poverty in short span of time.
  • Banking in unbanked areas - PMMY provided loans to bottom half of India providing loans to the unbanked areas.
  • Innovation - It induced innovation, creative ecosystem and also the risk-taking appetite of entrepreneurs which generated lot of employment opportunities.
  • 1st time entrepreneurs - The share of Shishu loans is the highest (40%) suggesting that the PMMY has largely supported first-time entrepreneurs.
  • Inclusion - PMMY has benefitted all segments of Indian society such as general, schedule caste/tribe (SC/ST) groups and other backward classes (OBCs).
  • SC/ST and OBC categories account for a total of 51 per cent of all Mudra accounts.
  • Women empowerment - The share of accounts held by women is 69%.
  • In 2022 disbursements of loans to women entrepreneurs registered an average growth of 28%.
  • Equal distribution - Since it is a national scheme, it has shown balanced penetration and economic growth across India.
  • States such as Uttar Pradesh, Odisha and Bihar have recorded all-round gains from the PMMY.


Overall, the PMMY has achieved its objectives of equitable and fair spatial distribution of benefits during these 8 years.

What are the future aspirations?

  • Timely utilization of benefits of 5G technology and e-commerce.
  • More awareness about Mudra cards and further penetration in to remote areas.
  • Scheme can be extended to personal sector other than farms and factories.
  • They can start a loan funding of less than Rs 50,000 so that the gap of 0-50k can be fulfilled.



  1. The Hindu Business Line│Sailent Features Of MUDRA
  2. The Live Mint│MUDRA Acheivemnets
  3. MUDRA│About MUDRA
  4. Picture Credits | Paisa Bazaar
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