New Delhi: On April 8, 2025, India paused to honor a transformative milestone: the 10th anniversary of the Pradhan Mantri MUDRA Yojana (PMMY), a bold initiative launched by Prime Minister Narendra Modi in 2015. Designed to empower small-scale entrepreneurs with accessible credit, PMMY has disbursed over 52 crore loans worth ₹32.61 lakh crore in a decade, sparking a wave of self-employment and economic resilience.
The Birth of PMMY: A Vision for the Unseen
PMMY emerged on April 8, 2015, with a clear goal: to bring financial support to micro-entrepreneurs who lacked access to traditional banking. Targeting non-corporate, non-farm small businesses, the scheme operates through the Micro Units Development and Refinance Agency (MUDRA) and partners with a wide array of lenders—Scheduled Commercial Banks, Regional Rural Banks, Non-Banking Financial Companies, Small Finance Banks, and Microfinance Institutions. These institutions provide loans to kickstart or grow ventures in sectors like manufacturing, retail, services, and allied agricultural pursuits such as dairy farming, poultry rearing, and honey production.
The scheme structures its offerings into four distinct tiers:
- Shishu: Loans up to ₹50,000 for those taking their first entrepreneurial steps.
- Kishor: Loans from ₹50,000 to ₹5 lakh for businesses poised for growth.
- Tarun: Loans between ₹5 lakh and ₹10 lakh for more mature enterprises.
- Tarun Plus: Introduced in October 2024, this tier provides loans from ₹10 lakh to ₹20 lakh to help businesses scale further.
By removing the collateral requirement and offering adaptable repayment terms, PMMY has opened doors for countless individuals previously excluded from formal credit systems.
Ten Years of Triumph: The Numbers Behind the Change
Over the past decade, PMMY has grown into a cornerstone of India’s economic framework, delivering results that echo across rural and urban landscapes. Here’s a look at its key accomplishments as of April 2025:
- Massive Scale: More than 52 crore loans have been approved, totaling ₹32.61 lakh crore, with the average loan amount rising from ₹38,000 in FY16 to ₹1.02 lakh in FY25.
- MSME Surge: Lending to Micro, Small, and Medium Enterprises has leaped from ₹8.51 lakh crore in FY14 to ₹27.25 lakh crore in FY24, with projections pointing to over ₹30 lakh crore in FY25. MSMEs now account for almost 20% of total bank lending, up from 15.8% a decade earlier.
- Women at the Forefront: Women represent 68% of all beneficiaries, with their average loan size increasing at a 13% annual growth rate to ₹62,679 by FY25, driving employment and empowerment.
- Equity in Action: Approximately 50% of loan accounts belong to SC, ST, and OBC entrepreneurs, while 11% are held by minority community members, broadening financial access.
- Changing Priorities: The Kishor tier’s share of disbursements has risen from 5.9% in FY16 to 44.7% in FY25, reflecting bolder entrepreneurial goals, alongside growing uptake in Tarun and Tarun Plus categories.
These figures paint a picture of a scheme that’s not just funding businesses but fostering a movement of self-reliance.
Regional Highlights: States Leading the Way
PMMY’s influence spans India’s vast geography, with some regions standing out for their loan disbursement achievements as of February 28, 2025:
- Tamil Nadu: Leads with ₹3.23 lakh crore, fueled by a thriving small-business culture.
- Uttar Pradesh: Follows with ₹3.14 lakh crore, tapping into its large and ambitious population.
- Karnataka: Claims ₹3.02 lakh crore, powered by innovation and enterprise.
- West Bengal: Secures ₹2.82 lakh crore, rooted in its strong trade networks.
- Bihar: Achieves ₹2.81 lakh crore, a sign of progress in underserved areas.
- Maharashtra: Registers ₹2.74 lakh crore, excelling in industry and services.
In Union Territories, Jammu and Kashmir shines with ₹45,815.92 crore across more than 21 lakh accounts, proving PMMY’s ability to reach even the most remote corners.
What Makes PMMY Tick: Core Advantages
The scheme’s success hinges on its practical, entrepreneur-friendly features:
- Zero Collateral: Loans up to ₹20 lakh require no asset pledges, easing entry for newcomers.
- Low-Cost Access: Many lenders waive processing fees, making credit affordable.
- Flexible Terms: Repayment spans 1 to 5 years, with room for extensions in certain cases.
- No Early Payoff Fees: Borrowers can settle loans ahead of schedule without penalties.
- Support for Women: Lower interest rates for female entrepreneurs spur gender equity.
Experts advise applicants to present a detailed business plan, maintain a strong repayment history, and work with recognized lenders to secure the most favorable rates, amplifying PMMY’s benefits.
From Vision to Victory: Beneficiary Tales
On April 8, 2025, PM Modi hosted PMMY beneficiaries at his residence, shining a light on their inspiring journeys:
- Kerala’s Green Innovator: Gopi Krishan quit his Dubai job after discovering MUDRA, launching a renewable energy venture that now sustains jobs and eco-friendly solutions.
- Chhattisgarh’s Cafe Trailblazer: A 23-year-old woman turned her home recipes into “House of Puchka,” a bustling Raipur cafe, thanks to smart planning and risk-taking.
- Kashmir’s Baking Success: Mudassir Naqshbandi went from modest earnings to running “Bake My Cake” in Baramulla, employing 42 people and relying on UPI for 90% of sales.
Modi encouraged these entrepreneurs to thank the bank staff who supported them, highlighting how such recognition builds trust in the lending ecosystem. Their stories showcase PMMY’s power to turn aspirations into realities.
Modi’s Message: Empowerment Through Inclusion
Celebrating a decade of MUDRA, PM Modi took to X to share his pride. “This scheme has lit up lives long overlooked, offering them the tools to succeed,” he wrote. He praised its reach, noting that women account for over 70% of beneficiaries and SC, ST, and OBC groups hold nearly half the accounts. “Each loan is a step toward dignity and opportunity,” he added.
Modi sees PMMY as a driver of both financial access and social upliftment, aligning with India’s self-reliance mission. Its international recognition, including accolades from the IMF for advancing women-led ventures and economic formalization, cements its global standing.
The Future Beckons: Scaling New Heights
As PMMY enters its next phase, ideas for a “MUDRA 2.0” are taking shape, focusing on financial literacy, wider equity, and deeper rural penetration. The Tarun Plus tier’s debut in 2024 signals a shift toward supporting larger-scale ambitions.
With MSMEs employing nearly 10 crore people—second only to agriculture—PMMY’s role in sustaining livelihoods and boosting growth is critical. As digital payments like UPI become the norm and loan demands evolve, the scheme is set to propel India’s economic story forward.
A Legacy Worth Celebrating
The 10-year journey of Pradhan Mantri MUDRA Yojana is a saga of hope and hustle. With over 52 crore loans worth ₹32.61 lakh crore, it has uplifted women, empowered the marginalized, and sparked an entrepreneurial awakening. From Tamil Nadu’s busy markets to Jammu and Kashmir’s quiet valleys, its impact is profound and far-reaching.
As India marks #10YearsOfMUDRA, PMMY stands as proof that small support can yield big results. It’s a model of resilience and inclusion, paving the way for a future where every dream has a chance to thrive.
FAQs
1. What is the Pradhan Mantri MUDRA Yojana (PMMY)?
Answer: The Pradhan Mantri MUDRA Yojana (PMMY) is a government initiative launched on April 8, 2015, by Prime Minister Narendra Modi to provide collateral-free loans to small and micro-entrepreneurs in India. It supports non-corporate, non-farm businesses in sectors like manufacturing, trading, services, and allied agriculture (e.g., dairy, poultry). Loans up to ₹20 lakh are offered through banks, NBFCs, and microfinance institutions under four categories: Shishu (up to ₹50,000), Kishor (₹50,000–₹5 lakh), Tarun (₹5 lakh–₹10 lakh), and Tarun Plus (₹10 lakh–₹20 lakh).
2. Who is eligible to apply for a MUDRA loan?
Answer: Individuals, startups, or small business owners running non-corporate, non-farm micro-enterprises are eligible for PMMY loans. This includes shopkeepers, artisans, vendors, and those in allied agricultural activities like beekeeping or poultry farming. Applicants must approach a participating lender—such as Scheduled Commercial Banks, Regional Rural Banks, or Microfinance Institutions—with a business plan. There’s no collateral required, making it accessible to those without assets, though a good repayment history can improve approval chances.
3. How has PMMY empowered women and marginalized communities?
Answer: PMMY has significantly boosted inclusion, with women making up 68% of its beneficiaries as of April 2025, often receiving loans at concessional rates to start or grow businesses. Additionally, 50% of loan accounts belong to SC, ST, and OBC entrepreneurs, while 11% are held by minority groups. Over 52 crore loans worth ₹32.61 lakh crore have been disbursed in 10 years, helping these communities achieve financial independence and create jobs.
4. What are the benefits of a MUDRA loan?
Answer: MUDRA loans offer several advantages: no collateral is needed for loans up to ₹20 lakh, many banks waive processing fees, repayment terms range from 1 to 5 years (with possible extensions), and there are no penalties for early repayment. Women entrepreneurs enjoy lower interest rates, and the scheme’s flexibility supports a variety of small-scale ventures, from street stalls to manufacturing units, fostering grassroots economic growth.
5. Which states have seen the highest MUDRA loan disbursements?
Answer: As of February 28, 2025, Tamil Nadu leads with ₹3.23 lakh crore in PMMY loan disbursements, followed by Uttar Pradesh (₹3.14 lakh crore), Karnataka (₹3.02 lakh crore), West Bengal (₹2.82 lakh crore), Bihar (₹2.81 lakh crore), and Maharashtra (₹2.74 lakh crore). Among Union Territories, Jammu and Kashmir tops the list with ₹45,815.92 crore across over 21 lakh accounts, showcasing PMMY’s widespread impact.
