Government-backed MUDRA scheme has approved over 35 trillion rupees in loans and issued approximately 54 crore (540 million) loans
The Pradhan Mantri MUDRA Yojana (PMMY), launched in 2015, continues to be a key component of the government's strategy to enable access to affordable credit for micro and small enterprises. This initiative, designed to promote self-employment and entrepreneurship, has sanctioned over ₹35.13 lakh crore in loans since its inception.
The PMMY offers loans in three categories: Shishu, Kishore, and Tarun. Shishu loans range up to ₹50,000, Kishore loans range from ₹50,001 to ₹5 lakh, and Tarun loans range from ₹5 lakh to ₹20 lakh. The maximum loan amount under PMMY is ₹20 lakh, and it provides collateral-free credit to micro and small enterprises, targeting those who traditionally lack access to formal credit.
The PMMY contributes to employment generation and financial inclusion, and it continues to support small businesses and first-time borrowers. Recently, the PMMY introduced a new Tarun Plus category (2024–25) that offers collateral-free follow-on loans up to Rs 20 lakh to successful Mudra borrowers. As of June 2025, banks sanctioned Rs 4,930 crore to 34,697 Tarun Plus accounts.
The PMMY's layered product structure has expanded the range of loan sizes available to enterprises, enabling both first-time micro loans and larger follow-on financing. This expansion has led to greater credit access for micro and small enterprises, increased formalization and banking relationships, and measurable disbursements and scale.
However, it is important to note that outcomes beyond sanction numbers (repayment performance, employment created, business survivability, productivity gains) are not fully reported in the cited sources. Independent evaluations or academic studies measuring broader financial inclusion outcomes would be useful for a fuller assessment.
Moreover, the Credit Guarantee Fund for Micro Units (CGFMU) has been introduced to support lending institutions and reduce credit risk associated with loans to small borrowers. The government's strategy includes the PMMY as a means to support lending institutions, with the CGFMU serving as a mechanism to further strengthen the initiative.
In conclusion, the Pradhan Mantri MUDRA Yojana plays a crucial role in the government's overall economic strategy, aiming to strengthen the informal and unorganised enterprise sector in India and promote financial inclusion. With its recent updates and continued success, the PMMY remains a significant tool in the government's arsenal for fostering entrepreneurship and economic growth.
References: 1. Government's open data portal 2. World Bank Group: Pradhan Mantri MUDRA Yojana 3. Reserve Bank of India: Pradhan Mantri MUDRA Yojana 4. Financial Express: PMMY's new Tarun Plus category to boost MSME financing 5. Pradhan Mantri MUDRA Yojana: Year-by-year sanction/disbursement tables
The Pradhan Mantri MUDRA Yojana (PMMY) provides collateral-free credit to small entrepreneurs, supporting the growth of small businesses through loans ranging from micro to larger follow-on financing. The initiative, part of the government's economic strategy, aims to foster financial inclusion and strengthen the informal enterprise sector in India.
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