Pradhan Mantri Mudra Yojana: Marking milestones within a decade

When the Pradhan Mantri Mudra Yojana (PMMY) was introduced on April 8, 2015, its mandate to "fund the unfunded" seemed deceptively simple.

- V ANANTHA NAGESWARAN

Yet over the past decade, PMMY has reshaped India's credit landscape for micro and small entrepreneurs, extending collateral-free loans that have empowered millions to launch or expand businesses, improve household incomes, and fuel regional growth.

By December 2024, PMMY had disbursed over ₹31.3 trillion across 510 million loan accounts. This scale reflects both the latent demand among microentrepreneurs and the willingness of lenders supported by the Credit Guarantee Fund for Micro Units to underwrite risk where collateral was absent. Crucially, more than 100 million of these accounts belong to first-time borrowers, underscoring the scheme's catalytic role in seeding new ventures rather than merely refinancing existing ones.

From its inception, PMMY's tiered structure Shishu (up to ₹50,000), Kishore (₹50,000-₹5 lakh) and Tarun (₹5 lakh-₹10 lakh) allowed credit to grow with the enterprise. The October 2024 introduction of Tarun Plus (₹10 lakh-20 lakh for repeat borrowers with strong repayment records) further rewarded credit discipline and enabled microenterprises to graduate into the small enterprise segment. Over ten years, the share of Shishu accounts fell from 92 per cent to 63 per cent, while Kishore and Tarun segments expanded, and average ticket sizes nearly doubled for Shishu and stabilised above ₹8 lakh for Tarun an evidence of maturing credit demand.