10 Years of MUDRA Yojana: This year marks a remarkable milestone in India’s development journey. It is the 10th anniversary of the Pradhan Mantri MUDRA Yojana (PMMY). Launched in 2015 by Prime Minister Narendra Modi, this transformative scheme has become a symbol of financial empowerment. It has enabled millions of micro and small entrepreneurs to realize their dreams through easy access to credit.
What is MUDRA Yojana?
The Pradhan Mantri MUDRA Yojana was launched with the vision to provide collateral-free loans up to ₹20 lakh to small and micro businesses. The scheme is implemented through banks, NBFCs, and Microfinance Institutions. It is managed by the Micro Units Development and Refinance Agency (MUDRA). It aims to support non-corporate, non-farm small enterprises, particularly those in the informal sector.
Loan Categories Under PMMY
To cater to businesses at various stages of growth, MUDRA loans are divided into four categories:
- Shishu – Loans up to ₹50,000 for early-stage businesses
- Kishor – Loans from ₹50,001 to ₹5 lakh for growing enterprises
- Tarun – Loans from ₹5 lakh to ₹10 lakh for more established businesses
- Tarun Plus – Recently introduced, this category offers loans from ₹10 lakh to ₹20 lakh
These categories ensure that entrepreneurs receive the right level of financial support based on their business needs.
Impact Over the Decade
In the ten years since its launch, MUDRA has sanctioned over 52 crore loans. This total amounting to a total of ₹32.61 lakh crore. The average loan size has risen from ₹38,000 in FY16 to ₹1.02 lakh in FY25. It highlights the increasing confidence and scale of small business owners. This surge in demand reflects a positive shift in entrepreneurship across the country.
Boost to MSME Sector
MUDRA has played a pivotal role in strengthening India’s Micro, Small, and Medium Enterprises (MSMEs). According to the State Bank of India, MSME credit rose from ₹8.51 lakh crore in FY14 to ₹27.25 lakh crore in FY24, with projections to exceed ₹30 lakh crore by FY25. The MSME share in total bank credit has also increased from 15.8% to nearly 20%, emphasizing the growing economic importance of this sector.
Driving Social Inclusion
MUDRA stands out for its strong focus on social and financial inclusion. More than 70% of MUDRA beneficiaries are women. In this over 50% of accounts belong to Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBC). Additionally, 11% of accounts are held by individuals from minority communities. This is ensuring that credit reaches the most underserved and underrepresented groups.
Empowering Women Entrepreneurs
Women have been at the forefront of MUDRA’s success. The average loan for women has grown at a compound annual growth rate (CAGR) of 13%, reaching ₹62,679 by FY25. States with higher loans to women-led businesses have witnessed greater employment generation and stronger community-level economic development, reinforcing the link between women’s entrepreneurship and inclusive growth.
Top Performing States
Several states have emerged as top performers in MUDRA loan disbursals. Tamil Nadu leads with ₹3.23 lakh crore, followed closely by Uttar Pradesh at ₹3.14 lakh crore and Karnataka at ₹3.02 lakh crore. West Bengal, Bihar, and Jammu and Kashmir have also reported impressive disbursal numbers. For instance, Jammu and Kashmir alone recorded ₹45,815.92 crore across over 21 lakh loan accounts.
A Global Model for Financial Inclusion
MUDRA has received international acclaim, including recognition from the International Monetary Fund (IMF), for its role in promoting self-employment, increasing formal financial access, and encouraging women’s participation in the economy. It is viewed globally as a model for inclusive credit delivery and grassroots entrepreneurship development.
Supporting India’s Employment Engine
The scheme has significantly boosted employment in micro-enterprises, which collectively employ nearly 10 crore people. These businesses—ranging from food vendors and artisans to small shopkeepers and service providers—represent the second-largest source of employment in India, after agriculture.
The Road Ahead
As the MUDRA Yojana enters its second decade, the government is expected to focus on digital enhancements, loan monitoring systems, and sector-specific support. The success of PMMY so far reflects the untapped potential of India’s aspiring entrepreneurs, and with continued support, the scheme is poised to scale even greater heights.
Positive Takeaway
In ten years, the Pradhan Mantri MUDRA Yojana has evolved into a powerful engine of economic empowerment and social transformation. It has democratized access to finance, enabled entrepreneurship, and uplifted countless families out of poverty.
