2025, Vol. 6, Issue 1, Part J
Pradhan Mantri Mudra Yojana (PMMY) in India: A Critical Overview
Author(s): Jyotirmoy Koley
Abstract: Pradhan Mantri MUDRA Yojana (PMMY), initiated in 2015, has significantly contributed to advancing financial inclusion and supporting small enterprises in India. This analysis assessed the scheme's effectiveness, achievements, and challenges by employing secondary data from the MUDRA reports, RBI bulletins, and government sources. Since its inception, PMMY has disbursed over 52 crore loans amounting to ₹32.61 lakh crore, with 68% of these loans allocated to women and 50% to individuals from SC/ST/OBC communities. The scheme has facilitated the expansion of MSME credit, with lending increasing from ₹8.51 lakh crore in the financial year 2014 to ₹27.25 lakh crore in the financial year 2024. A notable shift from micro to small businesses was observed, with Kishor loans increasing from 5.9% in 2016 to 44.7% in 2025. The average loan size has increased from ₹38,000 in the financial year 2016 to ₹1.02 lakh in the financial year 2025, indicating business growth. Tamil Nadu, Uttar Pradesh, and Karnataka have emerged as leading states in loan distribution. The IMF has commended the PMMY to enhance financial access and promote entrepreneurship. However, challenges persist, such as inadequate Shishu loans, limited digital access in rural areas, borrowers' lack of financial literacy, confusion about similar programs, and increasing defaults on Kishore and Tarun loans. Policy recommendations include raising loan limits, improving rural access, implementing financial literacy initiatives, utilizing AI for NPA monitoring, and linking PMMY to the India Skill Initiative. While the PMMY has contributed significantly to financial inclusion and entrepreneurship, ongoing improvements are necessary to sustain its positive impact on India's economy.
DOI: 10.22271/27084515.2025.v6.i1j.541
Pages: 881-889 | Views: 96 | Downloads: 52
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How to cite this article:
Jyotirmoy Koley. Pradhan Mantri Mudra Yojana (PMMY) in India: A Critical Overview. Asian J Manage Commerce 2025;6(1):881-889. DOI: 10.22271/27084515.2025.v6.i1j.541
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